One of the four ovens at a bakery is being considered for replacement. Its salvage value and maintenance costs are given in the table below for several years. A new oven costs $80,000 and this price includes a complete guarantee of the maintenance costs for the first two years and it covers a good proportion of the maintenance costs for years 3 and 4. The salvage value and maintenance costs are also summarized in the table

Both the old and the new oven have similar productivity's and energy costs. Should the oven be replaced this year, if the MARR equals 10%?

Old Oven (Defender) New Oven Challenger) Year Salvage Value at Salvage Value at Maintenance End of Year, Maintenance Costs, 3 End of Year, Costs, 20,000 80,000 1 17,000 9,500 75.000 0 2 14,000 9,600 70,000 0 66,000 11,000 9,700 1,000 4 7,000 9,800 62,000 3,000