An engineer with Haliburton calculated the AW values shown for a presently owned machine by using estimates he obtained from the vendor and company records.

Retention Period             Years AW Value,$ per Year

1..........                                             – 92,000

2 ..........                                            – 81,000

3 ..........                                            – 87,000

4 .........                                             – 89,000

5 ..........                                           – 95,000

A challenger has an economic service life of 7 years with an AW of $–86,000 per year. Assume that used machines like the one presently owned will always be available and that the MARR is 12% per year. If all future costs remain as estimated for the analysis, the company should purchase the challenger:

(a) Now

(b) After 2 years

(c) After 3 years

(d) Never