Question 5 A company is considering replacing an existing machine (defender) with newer machine (challenger). If repaired, the defender can be used for another 5 years. The current market value of the defender is $7,500 (ie., it can be sold now for $7,500). The defender will have a salvage value after 5 years of $250. If kept, the defender will require an immediate $1,500 overhaul.