5. A firm purchased some equipment at a price of S50,000. The equipment resulted in an annual net sav- ings of $2,000 per year during the 10 years it was used. At the end of 10 years, the equipment was sold for $40,000. Draw a cash-flow diagram that depicts the situation. Assuming an annual effective interest rate of 6.5%, what was the equivalent cost to the company of this transaction on the purchase date? Two machines are being considered to do a certain task in a manufacturing plant. Machine A costs $240,000 new and $26,000 to operate and maintain each year. Machine B costs $320,000 new and $12,000 to operate and maintain each year. The machines are identical in all other aspects and will have no salvage value after eight (8) years. Assume an annual effective interest rate of 7.0%. Determine (by the equivalent uniform annual cost method) which alternative is least expensive. 6