Q10: Evaluate the ownership costs between two production machinery alternatives where you purchase the equipment, overhaul it once per year and dispose of it later without a final overhaul. Ignore tax and use a real cost of finance of 10% payable at the end of each year. Draw a cash flow diagram for each alternative. Calculate the net present worth of each option and propose which to select. The parameter and costs (in present day dollars) for each machine are: Option A Option B Purchase price $15000 $6000 Annual Overhaul $1000 $1600 Salvage value at end of life $2500 $1000 Life in years 12 4 Cost of finance 10% 10% 2017