(SA) A small company that manufactures vibration isolation platforms is trying to decide whether it should replace the current assembly system (D), which is rather labor intensive, at present or 1 year from now with a system that is more automated (C). Some components of the current system can be sold immediately for $10,000, but they will be worthless hereafter. The operating cost of the existing system is $173,000 per year. System C will cost $300,000 with a $50,000 salvage value after 4 years. Its operating cost will be $71,000 per year. If you are told to do a replacement analysis using an interest rate of 8% per year, which system would you recommend?

System	D	C
Market Value, $	10,000	300,000
AOC, $ per Year	173,000	71,000
Salvage Value, $	0	50,000
Life, Years	1	4

According to the replacement analysis, (Click to select) replace defender with system C OR retain defender