$9-3.$ The Ajax Corporation has an overhead crane that

has an estimated remaining life of $8$ years. The crane can

be sold now for $$5,000.$ If the crane is kept in service,

it must be overhauled immediately at a cost of $$4,000.$

Operating and maintenance costs will be $$2,500$ per year

after the crane is overhauled. The overhauled crane will

have zero MV at the end of the $7-$year study period. A new

crane will cost $$16,000,$ will last for $7$ years, and will have a

$$3,200$ MV at that time. Operating and maintenance costs

are $$1,200$ per year for the new crane. The company uses

a before$-$tax interest rate of $15\%$ per year in evaluating

investment alternatives. Should the company replace the

old crane? $(9\mathrm{.}4)$