It is estimated that a certain piece of equipment can save $6,000 per year in labor and material cost. The equipment has an expected life of five years and no salvage value. If the company must earn a 15% annual return on such investments, how much could be justified now for the purchase of this piece of equipment? What value of F3 would be equivalent to the payments shown in the cash flow diagram below? Assume the interest rate is 10%, compounded annually. You can buy a machine for $100,000 that will produce a net income, after operating expenses of $10,000 per year. If you plan to keep the machine for four years, what must the market (resale) value be at the end of four years to justify the investment? You must make a 12%annual return on your investment