An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a newrobot to replace the old robot. The following estimates have been developed for both the defender and the challenger. The company's before-taxMARR is 18% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for anindefinite period of time.DefenderCurrent MVRequired upgradeAnnual expensesThe AW value of the defender is $The AW value of the challenger is $The existing robotAnnual expensesRemaining useful life5 yearsUseful lifeMV at end of useful life-$1,400MV at end of useful lifeClick the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.be replaced right now.should notshouldN12345678910(Round to the nearest dollar)(Round to the nearest dollar)info$36.000$2,000$1,500CompoundAmountFactorSingle PaymentTo Find FGiven PF/P1.18001.39241.64301.93882.28782.69963.18553.75894.43555.2338Discrete Compounding: /-18%CompoundAmountFactorTo Find FGiven AFIAPresentWorth FactorTo Find PGiven FP/F0.84750.71820.60860.51580.43710.37040.3139ChallengerPurchase priceInstallation cost0.26600.22550.1911Print1.00002.18003.57245.21547.15429.442012.141515.327019.085923.5213DonePresentWorth FactorTo Find PGiven AP/A0.8475$52,000$6,000$1,000Uniform Series1.56562.17432.69013.12723.49763.81154.07764.30304.494110 years$6,500SinkingFundFactorTo Find AGiven FAF1.00000.45870.27990.19170.13980.10590.08240.06520.05240.0425- X1.18000.63870.45990.37170.31980 28590.26240.24520.23240.2225-CapitalRecoveryFactorTo Find AGiven PA/PIM3H

Annual worth (AW) is the present value of all future cash flows from an asset or project,…

An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a m robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. The company's before-t MARR is 18% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for an indefinite period of time. $36,000 Challenger Purchase price Installation cost Annual expenses $2.000 $1,500 Remaining useful life 5 years Useful life MV at end of useful life -$1,400 MV at end of useful life Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. Defender Current MV ☆ Required upgrade Annual expenses The AW value of the defender is $ The AW value of the challenger is $ The existing robot (Round to the nearest dollar) (Round to the nearest dollar) be replaced right now. $52,000 $6,000 $1,000 10 years $6,500

An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a m robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. The company's before-t MARR is 18% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for an indefinite period of time. $36,000 Challenger Purchase price Installation cost Annual expenses $2.000 $1,500 Remaining useful life 5 years Useful life MV at end of useful life -$1,400 MV at end of useful life Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. Defender Current MV ☆ Required upgrade Annual expenses The AW value of the defender is $ The AW value of the challenger is $ The existing robot (Round to the nearest dollar) (Round to the nearest dollar) be replaced right now. $52,000 $6,000 $1,000 10 years $6,500

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new
robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. The company's before-tax
MARR is 18% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for an
indefinite period of time.
Defender
Current MV
Required upgrade
Annual expenses
The AW value of the defender is $
The AW value of the challenger is $
The existing robot
Annual expenses
Remaining useful life
5 years
Useful life
MV at end of useful life
-$1,400
MV at end of useful life
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.
be replaced right now.
should not
should
N
1
2
3
4
5
6
7
8
9
10
(Round to the nearest dollar)
(Round to the nearest dollar)
info
$36.000
$2,000
$1,500
Compound
Amount
Factor
Single Payment
To Find F
Given P
F/P
1.1800
1.3924
1.6430
1.9388
2.2878
2.6996
3.1855
3.7589
4.4355
5.2338
Discrete Compounding: /-18%
Compound
Amount
Factor
To Find F
Given A
FIA
Present
Worth Factor
To Find P
Given F
P/F
0.8475
0.7182
0.6086
0.5158
0.4371
0.3704
0.3139
Challenger
Purchase price
Installation cost
0.2660
0.2255
0.1911
Print
1.0000
2.1800
3.5724
5.2154
7.1542
9.4420
12.1415
15.3270
19.0859
23.5213
Done
Present
Worth Factor
To Find P
Given A
P/A
0.8475
$52,000
$6,000
$1,000
Uniform Series
1.5656
2.1743
2.6901
3.1272
3.4976
3.8115
4.0776
4.3030
4.4941
10 years
$6,500
Sinking
Fund
Factor
To Find A
Given F
AF
1.0000
0.4587
0.2799
0.1917
0.1398
0.1059
0.0824
0.0652
0.0524
0.0425
- X
1.1800
0.6387
0.4599
0.3717
0.3198
0 2859
0.2624
0.2452
0.2324
0.2225
-
Capital
Recovery
Factor
To Find A
Given P
A/P
IM3H

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