Question 4 The Present Worth (PW) of the after-tax cash flows (ATCFS) through year k, PWk, for a Defender (the existing machine with three-year remaining useful life) and a Challenger (a new machine with five-year useful life) are given in the following table: PW of ATCFs through Year k (PWK) Year Defender Challenger 1 -$ 14,020 - $18,630 2 -$28,100 -$ 34,575 3 -$43,075 -$ 48,130 4 -$65.320 5 -$ 77,910 Assume the after-tax MARR is 12% per year. (a) (i) Copy the below table to the answer sheet and fill out the missing EUACS (Equivalent Uniform Annual Costs) through year k. Round off your answer to the NEAREST integer. (6 marks) Defender Challenger Year k EUACK (12%) EUACK (12%) 1 EUAC = $15,702 EUAC = $20,866 2 ? ? 3 ? ? 4 ? 5 ? (ii) What are the economic life AND the related minimum EUAC for BOTH the defender and the challenger? (8 marks) (b) (i) Copy the below table to the answer sheet and fill out the missing Marginal Costs for year k. Round off your answer to the NEAREST integer. (8 marks) Defender Year k PWk - PWK-1 Marginal Cost for Year k 1 N/A MC1 = $15,702 ? 2 ? 3 ? (ii) Based on the results in Part (a)(i) and Part (b)(i) above, for how long (in years) should the defender be kept before being replaced by the challenger? Why