Solve the following in Excel:

Example 9-12 (Engineering Economy Sixteenth Edition, WILLIAM G. SULLIVAN/ ELIN M. WICKS/C. PATRICK KOELLING)

The manager of a carpet manufacturing plant became concerned about the operation of a critical pumpin one of the processes. After discussing this situation with the supervisor of plant engineering, they decided that a replacement study should be done and that a nine-year study period would be appropriate for this situation. The company that owns the plant is using an after-tax MARR of 6% per year for its capital investment projects. The effective income tax rate is 40%. The existing pump, Pump A, including driving motor with integrated controls, cost $17,000 five years ago. The accounting records show the depreciation schedule to be following that of an asset with a MACRS (ADS) recovery period of nine years. Some reliability problems have been experienced with Pump A, including annual replacement of the impeller and bearings at a cost of $1,750. Annual expenses have been averaging $3,250. Annual insurance and property tax expenses are 2% of the initial capital investment. It appears that the pump will provide adequate service for another nine years if the present maintenance and repair practice is continued. An estimated MV of $750 could be obtained for the pump if it is sold now. It is estimated that, if this pump is continued in service, its final MV after nine more years will be about $200. An alternative to keeping the existing pump in service is to sell it immediately and to purchase a replacement pump, Pump B, for $16,000. A nine-year class life (MACRS five-year property class) would be applicable to the new pump under the GDS. An estimated MV at the end of the nine-year study period would be 20% of the initial capital investment. Operating and maintenance expenses for the new pump are estimated to be $3,000 per year.

Existing Pump A (defender)
MACRS (ADS) recovery period	9 years
Capital investment when purchased five years ago	$17,000
Total annual expenses	$5,340
Present MV	$750
Estimated market value at the end of nine additional years	$200
Replacement Pump B (challenger)
MACRS (GDS) property class	5 years
Capital investment	$16,000
Total annual expenses	$3,320
Estimated MV at the end of nine years	$3,200

Annual taxes and insurance would total 2% of the initial capital investment. The data for Example 9-12 are summarized in Table 9-6. Based on these data, should the defender (Pump A) be kept [and the challenger (Pump B) not purchased], or should the challenger be purchased now (and the defender sold)? Use an after-tax analysis and the outsider viewpoint in the evaluation. Solve in Excel.