Bruin Manufacturing is evaluating whether it should retain its current environmental test chamber and room or sell it immediately and purchase a new one. The relevant costs are shown below. The current one can be kept for another 5 years, given that an additional maintenance cost of $500 each year is provided each year.

Determine whether the current equipment should be replaced. Use a before-tax MARR of 13% per year and the

annual cost method.

	Defender	Challenger
Capital investment, $ 3 years ago	33,000	0
Capital investment	0	38,000
Annual operating expenses	5,250	5,450
Annual maintenance	500	0
Current market value	13,000	0
Estimated salvage value at the end of 5 additional years	1,500	23,000