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The Ajax Corpoartion has an overhead crane that has an estimated remaining life of 8 years. The crane can be sold now for $ 8

The Ajax Corpoartion has an overhead crane that has an estimated remaining life of 8 years. The crane can be sold now for $8 comma 000. If the crane is kept in service, it must be overhauled immidiately at a cost of $5 comma 000. Operating and maintenance costs will be $3 comma 000 per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the 8-year study period. A new crane will cost $21 comma 000, will last for 8years, and will have a $4 comma 000 MV at that time. Operating and maintenance costs are $2 comma 000 per year for the new crane. The company uses a before-tax interest rate of 11% per year in evaluating investment alternatives. Should the company replace the old crane?The Ajax Corpoartion has an overhead crane that has an estimated remaining life of 8 years. The crane can be
sold now for $8,000. If the crane is kept in service, it must be overhauled immidiately at a cost of $5,000. Operating
and maintenance costs will be $3,000 per year after the crane is overhauled. The overhauled crane will have zero
MV at the end of the 8-year study period. A new crane will cost $21,000, will last for 8 years, and will have a
$4,000MV at that time. Operating and maintenance costs are $2,000 per year for the new crane. The company
uses a before-tax interest rate of 11% per year in evaluating investment alternatives. Should the company replace
the old crane?
Reference
The AW of the old crane is?
The AW of the new crane is?
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