Q2: (9 points) You are a recycler of spent plutonium rods from nuclear reactors, and a new government mandate requires you to purchase a filtration system for your wastewater. You can choose between two machines: Machine 1 has a four-year life and costs 1,200,000. It has an annual pre-tax operating cost of $100,000 in the first year. Operating costs are expected to increase at a rate of 5% per year over the life of machine. Machine 2 has a six-year life costs $720,000. It has an annual pre-tax operating cost of $80,000 in the first year. The operating costs for the second machine are expected to increase at the rate of 8% per year over the life of the machine. You do not foresee any further changes in environmental laws or changes in water filtration technology. Both machines have zero salvage values. Both machines will be fully depreciated over their useful life using the straight line approach. The corporate tax rate is 34% and the appropriate discount rate is 12% Q2: (9 points) You are a recycler of spent plutonium rods from nuclear reactors, and a new government mandate requires you to purchase a filtration system for your wastewater. You can choose between two machines: Machine 1 has a four-year life and costs 1,200,000. It has an annual pre-tax operating cost of $100,000 in the first year. Operating costs are expected to increase at a rate of 5% per year over the life of machine. Machine 2 has a six-year life costs $720,000. It has an annual pre-tax operating cost of $80,000 in the first year. The operating costs for the second machine are expected to increase at the rate of 8% per year over the life of the machine. You do not foresee any further changes in environmental laws or changes in water filtration technology. Both machines have zero salvage values. Both machines will be fully depreciated over their useful life using the straight line approach. The corporate tax rate is 34% and the appropriate discount rate is 12%