Question 6 1 pts The Perez Company has the opportunity to invest in one of two mutually exclusive machines that will produce a product it will need for the foreseeable future. Machine A costs $10 million but realizes after-tax inflows of $4 million per year for 4 years. After 4 years, the machine must be replaced. Machine B costs $15 million and realizes after-tax inflows of $3.5 million per year for 8 years, after which it must be replaced. Assume that machine prices are not expected to rise because inflation will be offset by cheaper components used in the machines. The cost of capital is 5%. What is the equivalent annual annuity for the better machine? 0.497 million 0.845 million O 1.014 million O 1.342 million O 1.180 million Question 5 1 pts The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $12,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $3,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 8%. What is its optimal economic life? Year Annual Operating Cash Flow Salvage Value 0 -12,500 12,500 1 3,250 10,750 2 3,250 8,500 3 3,250 5,750 4 3,250 3,500 5 3.250 750 O 5 years O 2 years O 4 years O 1 year O 3 years