Your companys conveyor belt has broken and you have to decide whether to fix it or buy a new one. You ordinarily buy a new belt every ten years, and you have had the current one for seven years. New conveyor belts cost $21,000. Your firms discount rate for valuing cash flows is 8%. What is the most you should be willing to pay to repair the current belt? Salvage values and taxes are ignored.

A.

$8,065

B.

$6,300

C.

$7,468

D.

$3,130