Existing machineOne full time operator salary. $36,000$Variable overtime $3000$Fringe benefits $3000$Cost of defects $3000$Price of existing machine $60000$Useful life$5$ yearsSalvage value of the machine $36,000$Tax rate $35\%$Required rate of retum $15\%$YearPV Factor a$15\%|0870120\mathrm{.}756$New machineFully automated no operator is requiredCost of new machine $180000$Transport charges $3000$Installation costs $15000$Expected life $5$ ycarsAnnual maintenance $3000$Cost of defects $3000$Salvage value at year $5$ year $2000030\mathrm{.}65840\mathrm{.}572$S$6104970432$