B3. 1. a. Digem Mines has to choose between two alternative machines A and E which perform the same lnction but which have lives of 2 and 4 years, respectively. The initial cost of machine A is $3,{l{l and its annual operating costs are expected to be S. The initial cost of machine E is $42,{l[}[l and its annual operating costs are expected to he $95103. Assume that the projects are repeatable and there are no constraints on the availability of funds. Digem will use a discount rate of 10% p.a. to evaluate the two machines. a] Compute the net present values of the two machines using the constant chain of replacement assumption and the lowest cormnon multiple method. Which machine should Digem choose and why? b] Redo your analysis in part (a) using the constant chain of replacement assumption and the perpetuity method. Which machine should Digem choose? Comment on any differences between the method used here and that used in part (a). c] Now redo the analysis in part [b] using the constant chain of replacement assumption and the equivalent annuity value method. Which machine should Digem choose? Comment on any di'erences between the method used here and that used in parts (a) and {b}