Describe briefly what is mv

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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.

Defender                                                        Challenger

Current MV                   $38,000                        Purchase price                 $51,000

Required upgrade           $2,000                          Installation cost               $5,500

Annual expenses            $1,400                         Annual expenses               $1,000

Remaining useful life       6 years                         Useful life                        10 years

MV at end of useful life -$1,500                          MV at end of useful life       $7,000

The company's before-tax MARR is 20% 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.

Reference no: EM131506815

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