uses to make some components - either purchasing new machinery or subcontracting the production of the components. MARR is 10% per year compounded annually. Alternative 1 (Buy new machinery) New machinery will cost a total of $675,000 initially, have an annual O&M cost of $105,000, and a market value of $75,000 in 6 years. The existing production equipment will be traded in for a total of $112,500. Alternative 2 (Subcontract) Subcontracting will cost $190,000 per year. In addition, this option will require some warehousing operations, which is expected to cost $45,000 per year. If the subcontracting option is chosen, the existing production equipment will be sold for its market value of $80,000. a) (15 points) Compute the EUAC of Alternative 1 for a planning horizon of 6 years. b) (12 points) Compute the EUAC of Alternative 2 for a planning horizon of 6 years. c) (3 points) Based on an annual cost comparison, what is your recommendation