Required information Nuclear safety devices installed several years ago have been depreciated from a first cost of $200,000 to zero using the Modified Accelerated Cost Recovery System (MACRS). The devices can be sold on the used equipment market for an estimated $15,000, or they can be retained in service for 5 more years with a $9000 upgrade now and an operating expenses (OE) of $6000 per year. The upgrade investment will be depreciated over 3 years with no salvage value. The challenger is a replacement with newer technology at a first cost of $40,000,n=5 years, and S=0. The new units will have operating expenses of $7000 per year. Use a 5-year study period, an effective tax rate of 39\%, an after-tax minimum acceptable rate of return (MARR) of 17% per year, and an assumption of classical straight line depreciation (no half-year convention) to perform an after-tax AW-based replacement study. The annual worth of the challenger is determined to be $ Since the annual worth of the is smaller, it is retained