Two machines can be used to produce a part from titanium. The costs and other cash flows associated with each alternative are estimated. The salvage values are constant regardless of when the machines are replaced. Determine which alternative(s) should be selected for further analysis if alternatives must have a payback of 5 years or less. Perform the analysis with

(a) i = 0%,

(b) i = 10% per year.

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Semiautomatic Automatic Machine First cost, $ Net annual income, $ per year -90,000 -40,000 10,000 15,000 10 Maximum life, years Salvage value, $ 10