A firm owns a pressure vessel that it is contemplating replacing. the old pressure vessel has annul operating and maintenance expenses of $60,000 per year and it can be kept for five more years, at which time will have zero MV. It is belived that $30,00 could be obtained for the old pressure vessle if it were sold now.

A new pressure vessel can be purchased for $120,000. The new pressure vessel will have an MV of $50,000 in five years and will have annual operating and maintenance expenses of $30,000 per year. Using a before -tax MARR of 20% per year, determine whether or not the old pressure vessel should be replaced. A study period of five years is appropriate.