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3) (10 Points) An electronics manufacturer is trying to determine whether to buy a variable-speed machine or a dual-speed machine for its operations. The variable-speed

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3) (10 Points) An electronics manufacturer is trying to determine whether to buy a variable-speed machine or a dual-speed machine for its operations. The variable-speed machine is more expensive, but also more reliable, so will have less maintenance cost. The costs for each machine are shown below. Variable Dual Speed Speed First cost, $ -100,000 -200,000 Maintenance cost, $/year -30,000 2,000 Salvage value, $ 10,000 15,000 Life, years 5 5 a) (5 Points) Solve Question 3 using Benefit/Cost analysis. State your assumption(s) and show your work. b) (5 Points) In class, we discussed that, when conducting Benefit/Cost analysis, maintenance expenses can be shown as either cost or disbenefit. Explain what changes and why it would still not matter either way. Give another example that can be shown as cost or disbenefit

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