Your company bought a production line 5 years ago for $75,000. At that time, it was estimated to have a service life of 15 years and salvage at the end of its service life of $20,000 today. Your boss recently proposed to replace the production line with a modern production line expected to last 20 years and cost $120,000 today. This new production line could provide $10,000 savings in annual operating and maintenance costs, and have a salvage value of $30,000 at the end of 20 years. The seller of the new production line is willing to accept the old production line as trade-in for its current fair market value, which is $22,000 today. Your boss estimates that if the old production line is kept for 10 more years, its salvage value will be $15,000. If MARR is 8% per year, use replacement analysis to answer the following question: Should you keep the old production line or replace it with a new production line? Question 6 Part A: What is the sunk cost, if there is one? Q 55000 0 75000 0 50000 0 53000 Q There is no sunk cost. Your company bought a production line 5 years ago for $75,000. At that time, it was estimated to have a service life of 15 years and salvage at the end of its service life of $20,000 today. Your boss recently proposed to replace the production line with a modern production line expected to last 20 years and cost $120,000 today. This new production line could provide $10,000 savings in annual operating and maintenance costs, and have a salvage value of $30,000 at the end of 20 years. The seller of the new production line is willing to accept the old production line as trade-in for its current fair market value, which is $22,000 today. Your boss estimates that if the old production line is kept for 10 more years, its salvage value will be $15,000. If MARR is 8% per year, use replacement analysis to answer the following question: Should you keep the old production line or replace it with a new production line? Question 6 Part B: Complete the following table of information. Enter your answers in the format 123456 Defender Challenger What is the initial cost for a replacement analysis? What is the salvage value? What is the life of each production line? What are the annual maintenance costs? Your company bought a production line 5 years ago for $75,000. At that time, it was estimated to have a service life of 15 years and salvage at the end of its service life of $20,000 today. Your boss recently proposed to replace the production line with a modern production line expected to last 20 years and cost $120,000 today. This new production line could provide $10,000 savings in annual operating and maintenance costs, and have a salvage value of $30,000 at the end of 20 years. The seller of the new production line is willing to accept the old production line as trade-in for its current fair market value, which is $22,000 today. Your boss estimates that if the old production line is kept for 10 more years, its salvage value will be $15,000. If MARR is 8% per year, use replacement analysis to answer the following question: Should you keep the old production line or replace it with a new production line? Question 6 Part D: What is the AEC of the defender? Enter your answers in the format 1234 Your company bought a production line 5 years ago for $75,000. At that time, it was estimated to have a service life of 15 years and salvage at the end of its service life of $20,000 today. Your boss recently proposed to replace the production line with a modern production line expected to last 20 years and cost $120,000 today. This new production line could provide $10,000 savings in annual operating and maintenance costs, and have a salvage value of $30,000 at the end of 20 years. The seller of the new production line is willing to accept the old production line as trade-in for its current fair market value, which is $22,000 today. Your boss estimates that if the old production line is kept for 10 more years, its salvage value will be $15,000. If MARR is 8% per year, use replacement analysis to answer the following question: Should you keep the old production line or replace it with a new production line? Question 6 Part D: What is the AEC of the challenger? Enter your answers in the format 1234 Your company bought a production line 5 years ago for $75,000. At that time, it was estimated to have a service life of 15 years and salvage at the end of its service life of $20,000 today. Your boss recently proposed to replace the production line with a modern production line expected to last 20 years and cost $120,000 today. This new production line could provide $10,000 savings in annual operating and maintenance costs, and have a salvage value of $30,000 at the end of 20 years. The seller of the new production line is willing to accept the old production line as trade-in for its current fair market value, which is $22,000 today. Your boss estimates that if the old production line is kept for 10 more years, its salvage value will be $15,000. If MARR is 8% per year, use replacement analysis to answer the following question: Should you keep the old production line or replace it with a new production line? [table] Question 6 Part E: Should you keep the old production line? 0 Yes, the AEC of the challenger is greater than the AEC of the defender. 0 Yes, the AEC of the challenger is less than the AEC of the defender. O No, the AEC of the challenger is greater than the AEC of the defender. O No, the AEC of the challenger is less than the AEC of the defender