The manufacturing equipment, which originally cost $530,000, has a book value of $450,000, a remaining useful life of five years, and a zero salvage value. If the equipment is not used to produce bicycle frames, it can be leased for $74,000 per year. Thornton has the opportunity to purchase for $870,000 new manufacturing equipment that will have an expected useful life of five years and a salvage value of $40,000. This equipment will increase productivity substantially, reducing unit-level labor