advanced machine costs $20,000 and will have operating costs of $4,000 in the first year, and increasing by $2,000 per year thereafter. The expected salvage value of the new machine is so.000 at the end of the first year and will decrease by $1000 every year thereafter. Find the 3. A company has decided to replace its inspection machine with an advanced one. The missing values in the following table and determine the economic life of the new | Total Cost (8%) ..(10 points) machine Toe(896) 14,000 %) CR (8%) 15,600 +-'1960, 1 2 3 6,528 4 5,372 5 4,669 6,807 12,346 OPTIMAL n 4. Given the estimated useful life of certain asset to be 7 years. Assume the initial cost of the asset to be $200,000. Use the MACRS system to determine the book value at the end of year 2 SOLUTION (5 points) | BOOK VALUE AT THE END OF YEAR 2=