These are all part of the same question
5 years ago, a multi-axis NC machine was purchased for the express purpose of machining large, complex parts used in commercial and military aircraft worldwide. It cost $350,000, had an estimated life of 15 years, and O&M costs of $50,000 per year. It was originally thought to have a salvage value of $20,000 at the end of 15 years but is now believed to have a remaining life of 5 years with no salvage value at that time. With business booming the existing machine is no longer sufficient to meet production needs. It can be kept and supplemented by purchasing a new, smaller Machine S for $230,000 that will cost $36,000 per year for O&M have a life of 10 years, and salvage value of $230,000(0.8") after t years. As an alternative, a larger, faster, and more capable Machine L can be used alone to replace the current machine. It has cash price without trade-in of $450,000. O&M costs of $70,000 per year salvage value of $450,000(0.8") after tyears, and a 15 year life. The present machine can be sold on open market for a maximum of $70,000, MARR is 15%, and the planning horizon is 5 years. a. Clearly show the cash flow profile for each alternative using a cash flow approach (insider's viewpoint approach). Provide cash flow for yeart 0,3 and 5. Machine NC &S Machine Cash flow Cash flow t 0 $ 1 $ $ 2 $ $ 3 $ $ 4 $ $ 5 $ $ b. Using an EUAC and a cash flow approach (insider's viewpoint approach), decide which is the more favorable alternative 1. EUAC of the combination of multi-axis NC machine and machines $ 2.EUAC of the machine $ 3.Favorable alternative: c. Clearly show the cash flow profile for each alternative using an opportunity cost approach loutsider's viewpoint approach) Provide cash flow for year t=0,3 and 5. Machine NC&S Machine L Cash flow t Cash flow 0 $ 1 $ $ 2 $ $ 3 $ $ 1 $ $ 2 $ $ 3 $ $ $ 4 $ $ 5 $ d. Using an EUA comparison and an opportunity cost approach (outsider's viewpoint approach), decide which is the more favorable alternative 1. EUAC of the combination of multi-axis NC machine and machines $ 2. EUAC of the machine $ 3. Favorable alternative