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 $$$$5$ comma $000.$ Operating and maintenance costs will be $$$$3$ comma $000$ per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the $8-$year study period. A new crane will cost $$$$21$ comma $000,$ will last for $8$years$,$ and will have a $$$$4$ comma $000$ MV at that time. Operating and maintenance costs are $$$$2$ comma $000$ per year for the new crane. The company uses a$$ 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