3. (40 points) Consider the following information for a machine. Assume the balance- declining depreciation method for calculating the salvage value at each year and MARR=12%. The current machine has been installed a couple of years ago with cost of $5000 and its market value now is estimated to be $36,000. The new machine can be purchased at $180,000 and its installation cost is $12,000. The other data of the two machines are as the following table. a) Obtain the EAC of capital, M&O cost, and the total cost of both defender and challenger over the years 1 to 5 and draw the curves in Excel. b) How we can analyze if the defender should be replaced by the challenger now and obtain the replacement decision. period (years) 0 1 2 3 4 5 Defender Challenger Initial cost M&O Salvage Salvage M&O Value Initial Value Cost (5) 36,000 180,000 70,000 32,000 70,000 32,000 90,000 38,000 120,000 44,000 120,000 6,000 50,000 40,000 3. (40 points) Consider the following information for a machine. Assume the balance- declining depreciation method for calculating the salvage value at each year and MARR=12%. The current machine has been installed a couple of years ago with cost of $5000 and its market value now is estimated to be $36,000. The new machine can be purchased at $180,000 and its installation cost is $12,000. The other data of the two machines are as the following table. a) Obtain the EAC of capital, M&O cost, and the total cost of both defender and challenger over the years 1 to 5 and draw the curves in Excel. b) How we can analyze if the defender should be replaced by the challenger now and obtain the replacement decision. period (years) 0 1 2 3 4 5 Defender Challenger Initial cost M&O Salvage Salvage M&O Value Initial Value Cost (5) 36,000 180,000 70,000 32,000 70,000 32,000 90,000 38,000 120,000 44,000 120,000 6,000 50,000 40,000