Please use the Challenger-Defender rate of return analysis (pair-wise incremental analysis)

2. Problem 8-38. (70 points) The New England Soap Company is considering adding some processing equipment to the plant to aid in the removal of impurities from some raw materials. By adding the processing equipment, the firm can purchase lower-grade raw material at reduced cost and upgrade it for use in its products. Four different pieces of equipment, all with 20year lives, are being considered. S18,000 TS25000 S6,000 S7,500 S30000 $9,000 Initial cost TS10,000 Annual Benefit S4,000 (savings in materials cost) Annual S2,000 Operating Cost S3,000 S3,000 S4,000 The company can obtain a 15% annual return on its investment in other projects and is willing to invest money on the processing equipment only as long as it can obtain 15% annual return on each increment of money invested, which one, if any, of the alternatives should be selected ? Use a challengerdefender rate of analysis pain -wise incremental return - analysis