Self-test Exercise 3.3 Scenario . Mercedes Benz is manufacturing the C model at its East London plant. They are in the process to upgrade the manufacturing plant to manufacture the new C model. They want to manufacture brake linings locally for this new model. Two methods can be used to manufacture these linings: Production equipment for Method A costs R900 000 and will have a salvage value of R90 500 after 5 years. The operating cost with this method will be R82 500 per year. The inflation is 5% and must be included in the cash flow. The revenue resulting from this project would be R125 000 per year. This revenue will increase with inflation. Production Method B costs R1 250 000 and will have a salvage value of R100 500 after 7 years. The operating cost with this method will be R75 000 per year. The inflation is 5% and must be included in the cash flow. The revenue resulting from this project would be R125 000 per year. This revenue will increase with inflation. Question 1. With a MARR = 12% per year, which method should be used on the basis of a present worth analysis? 2. If the MARR = 12%, do an FV analysis to decide which process should be purchased