A company owns a tract of timber that will keep growing for a number of years. It calculates that the timber's value less the cost of harvesting is currently $50,000 and that this figure will grow by 10% in the next year and by 5% in the following year. If the cost of capital is 8% p.a., when should the company harvest the timber? Your business can continue to use an older, less efficient machine at a cost of $8,000 annually. Alternatively, you can purchase a more efficient machine for $12,000 today plus $5,000 annual maintenance costs at the end of each year. If the new machine lasts 5 years and the cost of capital is 15% p.a., which alternative should you choose? Show all your workings and explain your choice