Use the following information for the last two questions. (…
Use the following information for the last two questions. (No points will be awarded if the final answer is reported without showing the steps) The Anju Company produces and sells 7,500 modular computer desks per year at a selling price of $750 each. Its current production equipment, purchased for $1,500,000 and with a four-year useful life, is only one-year old. It has a terminal disposal value of $0 and is depreciated on a straight-line basis. The equipment has a current disposal price of $400,000. However, the emergence of a new molding technology has led Anju to consider either upgrading or replacing the production equipment. The following table presents data for the two alternatives: Replace Upgrade One-time equipment costs $ 4,500,000 $ 2,000,000 Variable manufacturing cost per desk $ 70 $100 Remaining useful life of equipment (years) 3 3 Terminal disposal value of equipment $ 5,000 $0