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20 points 3. The old machine should be upgraded at a cost of $2,000 to meet the changing requirement of the market. The company may
20 points 3. The old machine should be upgraded at a cost of $2,000 to meet the changing requirement of the market. The company may replace the existing machine with a new machine that has advanced technology to match the current market. Based on the information of the table below, should the existing machine be kept, or it should be replaced by the new machine if the MARR is 25% per year. DEFENDER Current MV $38,200 Upgrade cost $2,000 (year 0) Annual $1,400 @ year 1, and Expenses Increasing at the rate of 8% per year thereafter Useful life 6 Challenger Purchase Price $51,000 Installation Cost $5,500 Annual $1,000 @year 1, and Expenses Increasing by $150 per year thereafter Useful life 6 MV at end of -$1,500 useful life MV at end of useful life $1,500
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