A foreman in a processing plant wants to evaluate whether to rebuild and repair five existing assets or replace them with four new assets that are more productive and capable of providing the same service as the current five machines. Four new assets can be acquired at time zero for a total of $240,000. The total maintenance, insurance, and operating costs for the new equipment is $20,000 at time zero, $40,000 at year one, $50,000 at year two, and $30,000 at year three. The anticipated salvage for these assets after three years is $100,000. The alternative is the repair the existing machines for a total cost of $50,000 at time zero. However, this approach will realize much higher operating costs over the next three years. In addition to the repair cost, the total operating cost for the repaired assets is estimated at $20,000 at time zero but escalates to $140,000 in each of years one and two and $70,000 in year three. The salvage for the existing assets after thee years of service is anticipated to be zero. The used machines have no salvage value today in the marketplace due to their current condition. The desired minimum rate of return on invested capital is a nominal 15.0%. Use present worth cost analysis and support the cost findings with an incremental analysis using rate of return and net present value to determine which alternative is economically preferred.