Simpson Chemical is considering two high-speed mixing machines for improving the production of its low-cost emulsion paint. Machine A has a first cost of RM 110,000, an annual operating cost of RM 60,000 and 4 year expected life. Machine B has a first cost of RM 175,000, an annual operating cost of RM 35,000 and 4 years expected life. Both machines have 5 % salvage values of the first cost. Given a MARR of 20 % per year. (a) Draw and label a complete cash flow diagram of BOTH systems. (2 Marks) (b) Use an annual worth-based incremental rate of return analysis to determine Ai*. Which investment should be selected? (8 Marks) (c) If the company uses a 3-year study period for paint products, which machine is economically favored? Reflect your selection on question (b) and question (c). (8 Marks) (d) Draw and label a complete incremental cash flow diagram for 3-year study period. (2 Marks) Simpson Chemical is considering two high-speed mixing machines for improving the production of its low-cost emulsion paint. Machine A has a first cost of RM 110,000, an annual operating cost of RM 60,000 and 4 year expected life. Machine B has a first cost of RM 175,000, an annual operating cost of RM 35,000 and 4 years expected life. Both machines have 5 % salvage values of the first cost. Given a MARR of 20 % per year. (a) Draw and label a complete cash flow diagram of BOTH systems. (2 Marks) (b) Use an annual worth-based incremental rate of return analysis to determine Ai*. Which investment should be selected? (8 Marks) (c) If the company uses a 3-year study period for paint products, which machine is economically favored? Reflect your selection on question (b) and question (c). (8 Marks) (d) Draw and label a complete incremental cash flow diagram for 3-year study period. (2 Marks)