5. Our company must replace an existing machine. Assuming MARR as 10% and the following data for current and the new machine, analyze the replacement decision. Note that both defender and challenger depreciate by the declining balance method. The depreciation rate of challenger is 20% per year. Challenger 5 Useful Life (years) Defender Remaining: 3 Was purchased $70,000 2 years ago and its market value is $40,000 now Initial Cost $85,000 For the first year it is For the 1 year about from now it $15,000 and will $20,000 then and will be increases increased by each year by $8,000 each the rate of year then after 5% Annual M&O costs