Question: 3- Your company needs a machine for the next seven years, and you have two choices. Machine A: costs $113000 and has an annual operating

 3- Your company needs a machine for the next seven years,

3- Your company needs a machine for the next seven years, and you have two choices. Machine A: costs $113000 and has an annual operating cost of $36000. Machine A has a useful life of seven years and a salvage value of S15600 at the end of 7 years. Machine B: costs $233000 and has an annual operating cost of $5000. Machine B has a useful life of five years and no salvage value. However, the life of machine B can be extended by two years with a major overhaul. If machine B's life is extended, it will still cost $5000 annually to operate and still have no salvage value. What is the maximum amount that you would pay at the end of years to extend the life of machine B by two years? Use AEC method. Assume an annual interest rate of 5.9%. Final

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