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9.18 Your employer, which manufactures vibration isolation platforms, is trying to decide whether it should immediately upgrade the current assembly system of belts and

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9.18 Your employer, which manufactures vibration isolation platforms, is trying to decide whether it should immediately upgrade the current assembly system of belts and gears (the defender), which is rather labor- intensive, with a more highly automated independent moving cart system (the challenger) 1 year from now. Some components of the current system can be sold now for $9000, but they will be worthless hereafter. The AOC of the existing system is $162,000 per year. The moving cart system will cost $160,000 with a $50,000 salvage value after 1 year, decreasing 30% per year thereafter until its expected life of 4 years. Its AOC is estimated to be $128,000 the first year, increasing 20% each following year. If you are asked to do a replacement analysis using an interest rate of 10% per year, which alternative would you recommend?

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