do an equal

comparison cost analysis based on annual cost to determine which machine should be purchased.

Include a table in the Problem section that shows the capital cost, operation and maintenance costs,

and salvage value for the two machine options (e.g., like the Project Alternatives information in

Module 4 Slide 33).

a) Draw and label the cash flow diagram for Machine A.

b) Compute the annual cost of Machine A for the capital costs (A1), the operation and

maintenance costs (A2), and the salvage value (A3).

c) Draw and label the cash flow diagram for Machine B.

d) Compute the annual cost of Machine B for the capital costs (A1), the operation and

maintenance costs (A2), and the salvage value (A3).

e) Do an equal comparison cost analysis of the two options using their annual cost, and

determine the best option.