Jaguar Engineerings current computer system has a salage value now of $5,000, which will fall to $4,000 by the end of the year The cost of lower productivity linked to this computer system is $3000 this year. A potential new system costs $12,000 and has the following salvage values and lost ptoductivity for each year.
Jaguar uses a before tax interest rate of 10%. Should Jaguar engineering replace its computer system this year? Why?