4. a) A construction company is trying to decide whether to retain an old piece of LD machinery or to replace it with a new machine. The old machine has a current market value of $10,000, maintenance costs of $2.500 per year, a remaining life of 5 years, and zero market value at the end of its useful life. The new machine has a purchase and installation cost of $24,000, maintenance costs of $1,000 per year, a useful life 8 years, and zero market value at the end of its useful life. The before-tax MARR is 15% per year. Perform a Present Worth analysis over a period of 5 years (after calculating the implied salvage value in the new machine) in order to decide if the company should replace the old machine. b) Determine the economic life of a machine that has a first cost of $5,000 and estimated operating costs and year-end market values shown in the table below. Assume that interest rate is (i) 0% and (ii) 10% End of Year Operating Cost Market Value $800 $4.000 $900 $3,500 $1, 100 $3,000 $1, 100 $2,000 $1,300 $1,500 $1,400 $1,000