A firm is considering the purchase of a new machine to increase the output of an existing production process. If each of these machines provides the same service over their useful lives and the MARR is 18%. Investment cost Net annual revenues Market value at end of useful life Useful life IRR Machine A Machine B $100,000 $55,000 $22,675 $17,879 $25,000 $12,000 5 years 19.7% 22.5% 10 years Which of the two machines, if any, do you recommend by using: 1. PW method. (8 points) 2. IRR method. (10 points) 3. Coterminated assumption with a study period of 7 years. (12 points) A firm is considering the purchase of a new machine to increase the output of an existing production process. If each of these machines provides the same service over their useful lives and the MARR is 18%. Investment cost Net annual revenues Market value at end of useful life Useful life IRR Machine A Machine B $100,000 $55,000 $22,675 $17,879 $25,000 $12,000 5 years 19.7% 22.5% 10 years Which of the two machines, if any, do you recommend by using: 1. PW method. (8 points) 2. IRR method. (10 points) 3. Coterminated assumption with a study period of 7 years. (12 points)