Intro The Fairmont Hotel in San Francisco needs to replace its air conditioning system. There are two alternatives, both of which can do the job equally well: Machine name Purchase price Operating cost (end of each year) Useful life (years) Straight line depreciation to zero over (years) Salvage value at end of useful life AC 1 AC 2 $40,000 $60,000 $18,000 $8,000 4 7 4 7 $0 $0 The relevant discount rate is 10% and the marginal tax rate is 35%. IB Attempt 1/2 for 10 pts. Part 1 What is the operating cash flow for AC 1 per year? 0+ decimals Submit Part 2 IB Attempt 1/2 for 10 pts. What is the equivalent annual cost for AC 1 (in absolute terms)? 0+ decimals Submit IB Attempt 1/2 for 10 pts. Part 3 What is the operating cash flow for AC 2 per year? 0+ decimals Submit Attempt 1/2 for 10 pts. Part 4 What is the equivalent annual cost for AC 2 (in absolute terms)? 0+ decimals Submit IB Attempt 1/2 for 10 pts, Part 5 Which AC system should the company buy? The system with the lower equivalent annual cost The system with the higher equivalent annual cost Submit