a) What is the AW of the defender?

b) What is the AW of the challenger?

A company has an overhead crane that has an estimated remaining life of 9 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 $3,000 per year after the crane is overhauled. The overhauled crane will have $1,500 MV at the end of the 9-year study period. A new crane will cost $48,000, will last for 9 years, and will have a $5,000 MV at that time. Operating and maintenance costs are $1,600 per year for the new crane. The company uses a before-tax interest rate of 9% per year in evaluating investment alternatives. A company has an overhead crane that has an estimated remaining life of 9 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 $3,000 per year after the crane is overhauled. The overhauled crane will have $1,500 MV at the end of the 9-year study period. A new crane will cost $48,000, will last for 9 years, and will have a $5,000 MV at that time. Operating and maintenance costs are $1,600 per year for the new crane. The company uses a before-tax interest rate of 9% per year in evaluating investment alternatives