Problem
A current asset (defender) is being evaluated for potential replacement. It was purchased four years ago at a cost of $62,000. It has been depreciated as a MACRS (GDS) five-year property-class asset. The present MV of the defender is $12,000. Its remaining useful life is estimated to be four years, but it will require additional repair work now (a one-time $4,000 expense) to provide continuing service equivalent to the challenger. The current effective income tax rate is 39%, and the after-tax MARR = 15% per year. Based on an outsider viewpoint, what is the aftertax initial investment in the defender if it is kept (not replaced now)?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.