ufacturing qphnt. whether to replace some of its to the existing equipment and the potential replacement equipment LO 6-5 Exercise 6-19B Asset 28,0 $27,000 4,000 8,000 10 years 30,000 Cost Cost Operating expenses" Salvage value Market value Book value 4,000 Salvage value 8,500 Useful life 10,500 10 years amounts shown for operating expenses are the cumulative total of all such expenses expected to be useful ife of the equipment Pu Based on this information, recommend whether to replace the equipment. Support your recommend, tion with appropriate computations Exercise 6-20B Asset replacement decision LO 6-5 McCoy Company, a Texas-based corporation, paid $120,000 to purchase an air conditioner on Janu- ary 1, 2007. During 2017, surging energy costs prompted management to consider replacing the air conditioner with a more energy-efficient model. The new air conditioner would cost S150,000. Elec tricity for the existing air conditioner costs the company $60,000 per year; the new model would cost only $40,000 per year. The new model, which has an expected useful life of 10 years, would be in- stalled on January 1, 2018. Because the old air conditioner is more durable, McCoy estimates it still has a remaining useful life of 10 years even though it has been used. The current market value of the old air conditioner is $54,000. The expected salvage value of both air conditioners is zero