The table below shows present worth calculations of the costs associated with using a

presently-owned machine (defender) and a possible replacement (challenger) for

different numbers of years. Determine when the defender should be replaced using an

interest rate of 10% per year and a 5-year study period. Use tabulated factors.

PW if Kept/Used Stated

Number of Years Number of Years, $______

Kept/Used Defender Challenger_

1 -36,000 -89,000

2 -75,000 -96,000

3 -125,000 -102,000

4 -166,000 -113,000

5 -217,000 -149,000