The Cyclone Corporation is contemplating the replacement of some old equipment. The pertinent information is as follows: $\begin{array}{lll}&\text { Old Equipment } & \begin{array}{l}
\text { Replacement } \
\text { Equipment }
\end{array}\
\text { Original cost } & \$ 93,000 & \$ 60,000 \
\text { U seful life in years } & 13 & 6 \
\text { Current age in years } & 7 & 0 \
\text { Book value } & \$ 57,000 & - \
\text { Disposal value now } & \$ 45,000 & - \
\text { Disposal value in 6 years } & 0 & 0 \
\text { Annual cash operating costs } & \$ 15,000 & \$ 11,000
\end{array}$ Required:
Prepare a cost comparison of all relevant items for the next six years together. Ignore income taxes. Comment on the best alternative for Cyclone Corporation.

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The Answer of The Cyclone Corporation is contemplating the replacement of some old equipment. The pertinent information is as follows: $\begin{array}{lll}&\text { Old Equipment } & \begin{array}{l}
\text { Replacement } \
\text { Equipment }
\end{array}\
\text { Original cost } & \$ 93,000 & \$ 60,000 \
\text { U seful life in years } & 13 & 6 \
\text { Current age in years } & 7 & 0 \
\text { Book value } & \$ 57,000 & - \
\text { Disposal value now } & \$ 45,000 & - \
\text { Disposal value in 6 years } & 0 & 0 \
\text { Annual cash operating costs } & \$ 15,000 & \$ 11,000
\end{array}$ Required:
Prepare a cost comparison of all relevant items for the next six years together. Ignore income taxes. Comment on the best alternative for Cyclone Corporation.

The Cyclone Corporation Is Contemplating the Replacement of Some Old