Wildhorse Roofing is faced with a decision. The company relies very heavily on the use of its $60-$foot extension lift for work on large homes and commercial properties. Last year, Wildhorse Roofing spent $$78,600$ refurbishing the lift. It has just determined that another $$47,000$ of repair work is required. Alternatively, it has found a newer used lift that is for sale for $$200,500.$ The company estimates that both lifts would have useful lives of $5$ years. The new lift is more efficient and thus would reduce operating expenses from $$112,000$ to $$85,800$ each year. Wildhorse Roofing could also rent out the new lift for about $$12,000$ per vear. The old lift is not suitable for rental. The old lift could currently be sold for $$29,500$ if the new lift is purchased. The new lift and old lift are estimated to have salvage values of zero if used for another $5$ years.

Prepare an incremental analysis showing whether the company should repair or replace the equipment. $($Enter negative amounts using either a negative sign preceding the number e$.$g$.-45$ or porentheses e$.$g$.(45).)$

Retain

Operating

expenses

Repair

costs

Rental

revenue

New

machine

cost

Sale of

old

machine

Should company repair or replace the equipment?

The equipment be replaced.