A piece of imaging equipment was purchased two years ago for $50,000 with an expected useful life of 5 years and a $5000 salvage value.
Determine whether the company should keep or replace the defender at a MARR of 10% per year.
A piece of imaging equipment was purchased two years ago for S50,000 with an expected useful life of 5 years and a $5000 salvage value. Since its installation performance was poor, it was upgraded for $20,000 one year ago. Increased demand now requires another upgrade for an additional $22,000 so that it can be used for 3 more years. Its new annual operating cost will be $27,000 with a $12,000 salvage after the 3 years. Alternatively, it can be replaced with new equipment costing $65,000 operating costs of $14,000 per year and an expected salvage of $23,000 after 3 years. If replaced now, the existing equipment will be sold for $7000. Determine whether the company should keep or replace the defender at a MARR of 10% per year. A. AWD = $-33,189 AWc = $-35,036 keep the defender B. AWD S-33,189 AWc S-35,036 replace the defender with the challenger C. AWD S-35,036 AWc $-33,189 keep the defender D. AWD S-35,036 AWc S-33,189 replace the defender with the challenger E. E. No correct answer
