9.18 Your employer, which manufactures vibration isolation platforms, is trying to decide whether it should...
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9.18 Your employer, which manufactures vibration isolation platforms, is trying to decide whether it should immediately upgrade the current assembly system of belts and gears (the defender), which is rather laborintensive, with a more highly automated independent moving cart system (the challenger) 1 year from now. Some components of the current system can be sold now for $9000, but they will be worthless hereafter. The AOC of the existing system is $162,000 per year. The moving cart system will cost $160,000 with a $50,000 salvage value after 1 year, decreasing 30% per year thereafter until its expected life of 4 years. Its AOC is estimated to be $128,000 the first year, increasing 20% each following year. If you are asked to do a replacement analysis using an interest rate of 10% per year, which alternative would you recommend
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