A 4 year-old die - casting machine, of market value $3500, is 50% too small for future production needs. A new machine with identical production capacity costs $5000 installed. Both machines are expected to have economic lives of 6 years from this date. Salvage values at that date will be $1000 for the new, and $700 for the old, machine. Annual operating expenses for the new and old machines are expected to be $3500 and $4000, respectively. A double - capacity machine is also available; its installed cost is $12000, with a Salvage value of $2000 at the end of its 6 - year economic life. Operating costs are expected to be $6000 per year. If the MARR is lo%, which machine should be purchased? ANSWER: EUACnew,small= $9231, EUACIarge= $8496; buy the large machine