Perform a PW-based after-tax replacement study from the information shown below using an after-tax MARR of 12% per year, tax rate of 25% and a planning horizon of 4 years. Since no revenues are estimated all taxes are negative and considered savings to the alternative. Capital assets that are classified as MACRS 3-year property have depreciation percentages of 33.33%, 44.45%, 14.81%, and 7.41% in years 1, 2, 3, and 4, respectively.

Defender Challenger

intial cost 45000 24000

estimated SV 5000 2000

market value now 15000 0

Operaring expanses 7000 8000

useful life 8 5

years owned 3 0