(In Excel) For interest rates from 1% to 8%, in increments of 1%, compute the following:

1. Assuming that at the end of the useful life, a machine is replaced with an identical machine having equal costs and salvage, develop a table showing the cash flow of each machine for equal lives (35 years). Use these cash flows to calculate the Net Present Costs for Machine A and B.

2. Calculate the Net Annual Costs for Machines A and B.

3. Calculate the cash flow for EOY 0 to 35 for the difference between the cash flow of B minus cash flow of A. Use this cash flow to compute the Incremental ROR for (B-A).

MACHINE A S34,965 S3,300 $825 at EOY 2, and increasing S150/yr thereafter 5 years 3,500 MACHINE B $49,670 $2,900 $475 at EOY 3, and increasing $250/yT thereafter 7 years $5,000 Capital Investment Annual Expenses Maintenance Expense Useful Life Salvage Value