The Damico Company produces and sells 5,300 modular computer desks per year at a selling price of $460 each.

The Damico Company produces and sells 5,300 modular computer desks per year at a selling price of $460 each. Its current production equipment, purchased for $1,700,000 and with a five-year useful life, is only two years old. It has a terminal disposal value of SO and is depreciated on a straight-line basis. The equipment has a current disposal price of $550,000. However, the emergence of a new molding technology has led Damico to consider either upgrading or replacing the production equipment. The following table presents data for the two alternatives:

The Damico Company produces and sells 5,300 modular computer desks per year at a selling price of $460 each. Its current prod

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