Please draw the cash flow diagram, and show all the calculations.

1. A company is offered two machine options for its new production line (only buying 1). The options are as follows. Which system would be better for the company? Initial cost Operation cost Potential Scrap value ($) ($/yr) income, ($/yr) ($) Alpha 250,000 20,000 80,000 10,000 Beta 400,000 30,000 120,000 20,000 a. If the prevalent interest rate is 12% per year, and both machines have a live of 10 years. b. If the prevalent interest rate is 10%, and the life of machine Alpha is 12 and Beta is 15 years. (Tip: Notice that the lives are different. This must be equalised either by equating the lives, or calculating the annual rates)