The replacement of a planning machine is being considered by the reardorn furniture company. (there is an indefinite future need for this type of machine.) the best challenger will cost $30 comma 000 for installation and will have an estimated economic life of 13 years and a $1 comma 500 mv at that time. it is estimated that annual expenses will average $13 comma 000 per year. the defender has a present bv of $6 comma 500 and a present mv of $5000. data for the defender for the next three years are given below. using a before-tax interest rate of 18% per year, make a comparison to determine whether it is economical to make the replacement now.

We have the comparison below

Explanation:

                                                     1          2           3

Expenses for the year 20000    27000      34000

PVIF at 12%                      0.89286   0.79719      0.71178

PV of expenses                 17857    21524       24201

Cumulative PV of expenses 178573938163582

EOY MV                                        -1000-1750-2500

PV of MV                                 -893-1395-1779

Total PW (4000+ PV of expenses - PV of MV) 22750   44776    69361

P/A                                            0.892861.690052.40183

EUAC                                    254802649428879

answertaxable income;

answer(8,000.)