5. Your, assignment is to prepare a ATCF replacement analysis study Challenger A new machine is under consideration; it will cost $90,000 and have annual operating and maintenance cost of $9,000 The new machine has an economic life of 20 years and a salvage value of $20,000. Use for depreciation straight-line method. Defender: if Kept The actual machine was installed 10 years ago at a cost of $80,000. Using a life of 20 year and estimates salvage value for depreciation purposes of $10,000. Now it has a market value (MVo) of $25,000. Annual operating and maintenance cost of $12,000. For depreciation use straight line method. If kept has an economic life of 10 (ten) years and a salvage value of $10,000 For both machines use income tax rate of 40%,and MARR of 8% a. Set up a table for the computation of ATCF for defender and challenger, and determine whether replacement now is economical using AW or EUAC 6. BTCF Replacement Analysis An existing machine is used on bending department. Due to maintanence and upgrade is necessary at cost of $2,000. A new machine will be consider for posible replacement MARR before income tax is 10%. More information below Defender Current market value Upgrade Cost (Year 0) $36,000 $2,000 $3,000/yr (from the second (2) to ten (10) year) 1,400/yr (from the first to ten year) and (Geometric Series) beginning the fourth year with $1,000 and increase by 5% until the 10 year 10 years Annual Revenues Annual Expense Useful life (years) Market value at the end of year 10 $4,500 Purchased Cost Installation Cost (Year 0) $60,000 $5,500 Annual Revenues Annual Expenses Useful life (years) Market value at the end of year 10 $ 4,000lyr(from the third (3) to ten (10) year) $1,000lyr (Arithmetic Series) increased by $250 from year fourth to ten. 10 years $8,500 Draw the cash flow diagram for both machines b. Determine EUAC for defender and challenger Should the existing machine be replaced? a. c