An existing robot is used in a commercial material laboratory to handle ceramic samples in the high-temperature environment that is part of several test procedures. Due to changing customer needs, the robot will not meet future service requirements unless it is upgraded at a cost of $1,800. Because of this situation, a new advanced technology robot has been selected for potential replacement of the existing robot. The accompanying estimates have been developed from information provided by some current users of the new robot and data obtained from the manufacturer. The firm's before-tax MARR is 20% per year. Based on this information, should the existing robot be replaced? Assume that a robot will be needed for an indefinite period.

Defender
Current MV	$38,900
Upgrade cost (year 0)	$1,800
Annual expenses	$1,200 in year one, and increasing at the rate of 8% per year thereafter
Useful life (years)	6
MV at end of useful life	-$1,200
Challenger
Purchase price	$55,000
Installation cost	$5,600
Annual expenses	$900 in year one, and increasing by $150 per year thereafter
Useful life (years)	10
MV at end of useful life	$7,500

Discrete Compounding;

iequals=88%

Single Payment

Uniform Series

Compound Amount Factor

Present Worth Factor

Compound Amount Factor

Present Worth Factor

Sinking Fund

Factor

Capital Recovery Factor

N

To Find F

Given P

F/P

To Find P

Given F

P/F

To Find F

Given A

F/A

To Find P

Given A

P/A

To Find A

Given F

A/F

To Find A

Given P

A/P

11

1.08001.0800

1.08001.0800

1.00001.0000

0.92590.9259

1.00001.0000

1.08001.0800

22

1.16641.1664

0.85730.8573

2.08002.0800

1.78331.7833

0.48080.4808

0.56080.5608

33

1.25971.2597

0.79380.7938

3.24643.2464

2.57712.5771

0.30800.3080

0.38800.3880

44

1.36051.3605

0.73500.7350

4.50614.5061

3.31213.3121

0.22190.2219

0.30190.3019

55

1.46931.4693

0.68060.6806

5.86665.8666

3.99273.9927

0.17050.1705

0.25050.2505

66

1.58691.5869

0.63020.6302

7.33597.3359

4.62294.6229

0.13630.1363

0.21630.2163

77

1.71381.7138

0.58350.5835

8.92288.9228

5.20645.2064

0.11210.1121

0.19210.1921

88

1.85091.8509

0.54030.5403

10.636610.6366

5.74665.7466

0.09400.0940

0.17400.1740

99

1.99901.9990

0.50020.5002

12.487612.4876

6.24696.2469

0.08010.0801

0.16010.1601

1010

2.15892.1589

0.46320.4632

14.486614.4866

6.71016.7101

0.06900.0690

0.14900.1490

1111

2.33162.3316

0.42890.4289

16.645516.6455

7.13907.1390

0.06010.0601

0.14010.1401

1212

2.51822.5182

0.39710.3971

18.977118.9771

7.53617.5361

0.05270.0527

0.13270.1327

1313

2.71962.7196

0.36770.3677

21.495321.4953

7.90387.9038

0.04650.0465

0.12650.1265

1414

2.93722.9372

0.34050.3405

24.214924.2149

8.24428.2442

0.04130.0413

0.12130.1213

1515

3.17223.1722

0.31520.3152

27.152127.1521

8.55958.5595

0.03680.0368

0.11680.1168

=2020%
	Single Payment			Uniform Series					Uniform Gradient
	Compound Amount Factor	Present Worth Factor		Compound Amount Factor	Present Worth Factor	Sinking Fund Factor	Capital Recovery Factor		Gradient Present Worth Factor	Gradient Uniform Series Factor
N	To Find F Given P F/P	To Find P Given F P/F		To Find F Given A F/A	To Find P Given A P/A	To Find A Given F A/F	To Find A Given P A/P		To Find P Given G P/G	To Find A Given G A/G
11	1.20001.2000	0.83330.8333		1.00001.0000	0.83330.8333	1.00001.0000	1.20001.2000		0.00000.0000	0.00000.0000
22	1.44001.4400	0.69440.6944		2.20002.2000	1.52781.5278	0.45450.4545	0.65450.6545		0.69440.6944	0.45450.4545
33	1.72801.7280	0.57870.5787		3.64003.6400	2.10652.1065	0.27470.2747	0.47470.4747		1.85191.8519	0.87910.8791
44	2.07362.0736	0.48230.4823		5.36805.3680	2.58872.5887	0.18630.1863	0.38630.3863		3.29863.2986	1.27421.2742
55	2.48832.4883	0.40190.4019		7.44167.4416	2.99062.9906	0.13440.1344	0.33440.3344		4.90614.9061	1.64051.6405
66	2.98602.9860	0.33490.3349		9.92999.9299	3.32553.3255	0.10070.1007	0.30070.3007		6.58066.5806	1.97881.9788
77	3.58323.5832	0.27910.2791		12.915912.9159	3.60463.6046	0.07740.0774	0.27740.2774		8.25518.2551	2.29022.2902
88	4.29984.2998	0.23260.2326		16.499116.4991	3.83723.8372	0.06060.0606	0.26060.2606		9.88319.8831	2.57562.5756
99	5.15985.1598	0.19380.1938		20.798920.7989	4.03104.0310	0.04810.0481	0.24810.2481		11.433511.4335	2.83642.8364
1010	6.19176.1917	0.16150.1615		25.958725.9587	4.19254.1925	0.03850.0385	0.23850.2385		12.887112.8871	3.07393.0739
1111	7.43017.4301	0.13460.1346		32.150432.1504	4.32714.3271	0.03110.0311	0.23110.2311		14.233014.2330	3.28933.2893
1212	8.91618.9161	0.11220.1122		39.580539.5805	4.43924.4392	0.02530.0253	0.22530.2253		15.466715.4667	3.48413.4841
1313	10.699310.6993	0.09350.0935		48.496648.4966	4.53274.5327	0.02060.0206	0.22060.2206		16.588316.5883	3.65973.6597
1414	12.839212.8392	0.07790.0779		59.195959.1959	4.61064.6106	0.01690.0169	0.21690.2169		17.600817.6008	3.81753.8175
1515	15.407015.4070	0.06490.0649		72.035172.0351	4.67554.6755	0.01390.0139	0.21390.2139		18.509518.5095	3.95883.9588