You have been asked to evaluate the purchase of a new machine costing 200. Technically, the machine lasts 4 years and would yield the annual net cash flows (after deduction of maintenance and repair costs) tabulated below. Further, the salvage values are given. Hence, to make an optimal decision, the company needs to decide whether to keep the machine or not at any point in time. All values are in thousands of US-S. Assume a flat discount rate of 10%. CF 110 90 5030 Salvage value1601107640 (a) What's the optimal machine life, i.c., how long should the company plan to operate the machine, if the project can only be conducted once? Show that you can solve this problem using the NPV rule by treating the alternative machine lives as separate investiment projects (b) What's the optia machine life (at each cycle) if the project can be repeated once through the replacement by an identical machine with same cost, cash flows, and salvage values? What's the NPV of the overall investment? Provide an economic intuition for your result Hint: Solve this problem backwards, i.e., by starting with the second cycle and then, given that result, deciding what's optimal in the first cycle (c) What's the opti achine life (at each cycle) f the project can be repeatedi finitely many ties (again under constant conditions)? What's the NPV of the overall investment? Hint: Solue this problem by deciding what machine life allous for the marimm equiv- alent annuit