Question: An elevator system in an office building can either be refurbished or replaced. Refurbishing the elevators will cost $55,000 and extend the life of the

An elevator system in an office building can either be refurbished or replaced. Refurbishing the elevators will cost $55,000 and extend the life of the elevators another 20 years. Salvage value at the end of 20 years will be $11,000. Annual maintenance costs will be $1,000 per year. The current salvage value of the elevators is $32,000. Replacing the elevator system will cost $140,000, with an expected life of 50 years. Maintenance costs will be $400 per year. Salvage value at the end of 50 years will be $28,000. Interest is 4% for either scenario. Based on Net Present Worth, which alternative would you recommend?

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