Use the information below to answer the following two questions: Moe's Tavern purchased a new keg refrigeration system a few months ago using traditional coolant gas system (e.g., freon). Lenny and Carl, patrons of Moe's and employees at a local plant, told Moe about a new refrigeration system using a new technology called Cold Fusion. Moe then went on to research a cold fusion refrigeration system to compare whether it made sense to upgrade so soon after updating his existing refrigeration system. Here is information related to the two systems. Acquisition Cost Old System $300,000 New System $360,000 Remaining Useful Life Resale Value (if sold now) 4 years $100,000 4 years $0 Salvage Value at end of 4 years $4,000 $6,000 Annual operating costs* $140,000 $80,000 *excluding depreciation & skunking costs Additional Information: Moe uses straight-line depreciation. The new system would reduce skunking rates from 5% to 2.5%. Skunked kegs caused by the refrigeration system cost Moe $5 a keg. Moe's Tavern averages approximately 100,000 kegs annually. What are Moe's annual skunking costs? Old System Annual Skunking 5% Rates Annual Skunking Costs New System 2.5%