Leopal Company is considering replacing a freight elevator.The current freight elevator has a book value of $37,500 and a remaining useful life of four years,at which time its salvage value will be zero.The current market value of the freight elevator is $5,000.Variable operating costs per year are $201,600 per year.Leopal has identified the following two possible replacement options.Prepare an analysis of the alternatives and whether either option should be used to replace the current elevator.

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The Answer of Leopal Company is considering replacing a freight elevator.The current freight elevator has a book value of $37,500 and a remaining useful life of four years,at which time its salvage value will be zero.The current market value of the freight elevator is $5,000.Variable operating costs per year are $201,600 per year.Leopal has identified the following two possible replacement options.Prepare an analysis of the alternatives and whether either option should be used to replace the current elevator.

Leopal Company Is Considering Replacing a Freight Elevator