An equipment replacement decision, under incremental analysis, requires

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Incremental analysis involves comparing the changes in costs and revenues between two alternatives. In the case of an equipment replacement decision, we need to calculate the present value of all changes in cash flows from the old equipment to the new equipment. This includes factors such as the purchase price of the new equipment, operating costs, salvage value of the old equipment, and any changes in revenues due to improved efficiency or productivity of the new equipment. Option A only considers the new equipment and the salvage value of the old asset, while option C only looks at the purchase prices of both assets. Option D is incorrect, as both options A and C are incomplete.

An Equipment Replacement Decision, Under Incremental Analysis, Requires