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The Ajax Corporation has an overhead crane that has an estimated remaining life of 10 years....

The Ajax Corporation has an overhead crane that has an estimated remaining life of 10 years. The crane could be sold now for $8,000. If the crane is kept in service, it must be overhauled immediately at a cost of $5,000. Operating and maintenance costs will be $3,000 per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the 8-year study period. A new crane will cost $20,000, will last for 8 years, and will have a $4,000 MV at that time. Operating and maintenance costs are $1,000 per year for the new crane. The company uses a before-tax interest rate of 10% per year in evaluating investment alternatives. In considering whether or not to replace the old crane, what is the AW of the preferred alternative? (Consider costs as a positive number, since these are both cost alternatives.)

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