When answering the following questions, assume that your company has a set as a time value of money for evaluation of options at 6%

3. As part of a larger manufacturing plant upgrade, you are tasked with deciding between 3 different options for a new machining operation. Option A has a shorter life span but the initial purchase price is the lowest. Option C has the longest expected life span but also the highest initial purchase price, while Option B has a life span and purchase price in between A and C. Each machine has the same annual production value for the manufacturing process. - What method for comparing options should you use and why?

4. After completing the economic evaluation of the three options in Part 3 above, the best option that you have selected has an expected useful life of 7 years and that is what your accounting department will use for depreciation and tax purposes. - What would the depreciation expense be for the selected option be in year 3 if the initial cost of the machining equipment were $200,000? - What would the amortized book value of that equipment be after year 3 if the company uses the tax purposes MACRS method for book value depreciation and the device has a future salvage value of $10,000? - Briefly describe how would you go about finding which option is the best deal?