i = 3%, MARR = 3

3. (7 pts) A construction company purchased a bulldozer 7 years ago for $320K. It has been depreciated to a book value of \$119K. The Caterpillar Company salesman has proposed replacing it with a new model for $260K and taking the present bulldozer in trade for $90K. It is estimated the current bulldozer will last 5 more years with an annual O&M of $8K/ year and can be sold then for $15K. The salesman claims the new bulldozer is much more reliable and will only have O\&M costs of $3K/ year, last 15 years, and still be salvaged for $40K. Company MARR is 20%. Is this a transaction that should be made this year, and how much is the difference? Cash flow diagrams are required