for both alternatives are provided in remote warehouses. This truck (the defender) can be sold at the present time for $40,000 and replaced by anew truck (the challenger) with a purchase price of 25. The existing transformers have 10 years of remaining. Suppose that the before tax MARR-8% r Recommend which action to follow after an appropriate criterion for comparing these Table P9-25 ite year $70,000. tives. List all assumptions necessary and ig ore a. Given the MV's and operating and maintenance alternativ costs that follow, what is the economic life of the challenger if MARR 10%? Note: This is a before-tax income taxes. (9.7) Extended Learning Exercise A truck was purchased our years ago for $65,000 to move raw materials and hed goods between a production facility and four analysis that does not require any the defender. (9.5) calculations intolving b. Suppose that the defender was set up ona depreciation schedule with a five-year MACRS class life at the time of its purchase (four years ago). The defender can be sold now for $40,000, or a rebuilt engine and transmission can be purchased and installed at a cost of $12,000 (capital investment with three-year depreciable life, straight line, salvage value - 0). If the defender is kept in service, assu that it will have operating and maintenance costs as shown in Part (a) and a MV of $0 at the end of four years. Determine the ATCFs for the defender (f 40%). (9.9) Challenger Defender EOY Market O&M EOY Market 0&M Value Costs Value Costs 1 $30,000 $8,500 1 $56,000 $5,500 2 20,000 10,500 2 44,000 6,800 3 12,00014,000 3 34,000 7400 4,000 16,000 4 22,000 9,700