Vernon Company is considering the replacement of some of its manufacturing equipment. Information regarding

the existing equipment and the potential replacement equipment follows.

$*$The amounts shown for operating expenses are the cumulative total of all such expected expenses to be

incurred over the useful life of the equipment.

Required

Calculate the total relevant cost of existing equipment and the potential replacement equipment. Should the

equipment be replaced?Vernon Company is considering the replacement of some of its manufacturing equipment. Information regarding

the existing equipment and the potential replacement equipment follows.

$*$The amounts shown for operating expenses are the cumulative total of all such expected expenses to be

incurred over the useful life of the equipment.

Required

Calculate the total relevant cost of existing equipment and the potential replacement equipment. Should the

equipment be replaced?