5 years ago, a multi-axis NC machine was purchased for the express purpose of machining large, complex parts used in commercial and military aircraft worldwide. It cost $350,000, had an estimated life of 15 years, and O&M costs of $50,000 per year. It was originally thought to have a salvage value of $20,000 at the end of 15 years but is now believed to have a remaining life of 5 years with no salvage value at that time. With business booming, the existing machine is no longer sufficient to meet production needs. It can be kept and supplemented by purchasing a new, smaller Machine S for $200,000 that will cost $32,000 per year for O&M, have a life of 10 years, and salvage value of $200,000(0.8t) after tyears. As an alternative, a larger, faster, and more capable Machine L can be used alone to replace the current machine. It has cash price without trade-in of $420,000, O&M costs of $76,000 per year, salvage value of $420,000(0.81) aftert years, and a 15 year life. The present machine can be sold on open market for a maximum of $70,000, MARR is 30%, and the planning horizon is 5 years. a. Clearly show the cash flow profile for each alternative using a cash flow approach (insider's viewpoint approach). Provide cash flow for year t=0,3 and 5. Machine NC & S Machine L Cash flow Cash flow 0 $ $ t $ 1 $ $ 2. $ $ 3 $ $ 4 $ $ $ 5 $ $ $ 2.EUAC of the machine L $ 3.Favorable alternative: c. Clearly show the cash flow profile for each alternative using an opportunity cost approach (outsider's viewpoint approach). Provide cash flow for year t=0, 3 and 5. Machine NC & S Machine L t Cash flow Cash flow 0 $ $ 1 $ $ $ N $ $ $ 3 $ $ $ 4 $ $ 5 5 $ $ $ $ d. Using an EUAC comparison and an opportunity cost approach (outsider's viewpoint approach), decide which is the more favorable alternative. 1. EUAC of the combination of multi-axis NC machine and machine S $ 2. EUAC of the machine L 5 years ago, a multi-axis NC machine was purchased for the express purpose of machining large, complex parts used in commercial and military aircraft worldwide. It cost $350,000, had an estimated life of 15 years, and O&M costs of $50,000 per year. It was originally thought to have a salvage value of $20,000 at the end of 15 years but is now believed to have a remaining life of 5 years with no salvage value at that time. With business booming, the existing machine is no longer sufficient to meet production needs. It can be kept and supplemented by purchasing a new, smaller Machine S for $200,000 that will cost $32,000 per year for O&M, have a life of 10 years, and salvage value of $200,000(0.8t) after tyears. As an alternative, a larger, faster, and more capable Machine L can be used alone to replace the current machine. It has cash price without trade-in of $420,000, O&M costs of $76,000 per year, salvage value of $420,000(0.81) aftert years, and a 15 year life. The present machine can be sold on open market for a maximum of $70,000, MARR is 30%, and the planning horizon is 5 years. a. Clearly show the cash flow profile for each alternative using a cash flow approach (insider's viewpoint approach). Provide cash flow for year t=0,3 and 5. Machine NC & S Machine L Cash flow Cash flow 0 $ $ t $ 1 $ $ 2. $ $ 3 $ $ 4 $ $ $ 5 $ $ $ 2.EUAC of the machine L $ 3.Favorable alternative: c. Clearly show the cash flow profile for each alternative using an opportunity cost approach (outsider's viewpoint approach). Provide cash flow for year t=0, 3 and 5. Machine NC & S Machine L t Cash flow Cash flow 0 $ $ 1 $ $ $ N $ $ $ 3 $ $ $ 4 $ $ 5 5 $ $ $ $ d. Using an EUAC comparison and an opportunity cost approach (outsider's viewpoint approach), decide which is the more favorable alternative. 1. EUAC of the combination of multi-axis NC machine and machine S $ 2. EUAC of the machine L