Halcrow, Incorporated expects $to$ replace a downtime tracking system currently installed $onCNC$ machines. The challenger system

has a first cost $of$ $$70,000,an$ estimated AOC $of$ $$20,000$ the first year increasing $by20\%$ per year thereafter, a maximum useful life $of$

$10$ years, and $a$ $$10,000$ market value after $1$ year decreasing $by10\%$ per year thereafter.

Required:

$a.Atan$ interest rate $of8\%$ per year, determine the ESL and corresponding $AW$ value for the challenger.

$b.$ What happens $to$ the ESL, $if$ the company $is$ able $to$ reduce the annual AOC percentage increase $to10\%?$

Navigation:

Use the Open Excel $in$ New Tab button $to$ launch this question.

When finished $in$ Excel, use the Save and Return $to$ Assignment button $in$ the lower right $to$ return $to$ Connect. Required:

Note: Use cells $A2toC14$ from the given information $to$ complete this question. Market Value should $be$ input and displayed $as$

positive values. All other answers should $be$ input and displayed $as$ negative values.

$(a)Atan$ interest rate $of8\%$ per year, determine the ESL and corresponding $AW$ value for the challenger. $(b)$ What happens $to$ the ESL, $if$ the company $is$ able $to$ reduce the annual AOC percentage increase $to10\%?$

ESL $isn=$

years