A company is considering replacing a broken inspection machine, with a new and more efficient one. The machine could be sold now for $5,000. If the old machine is kept, the operating costs of are expected to be $2,000 in the first year increasing by $1,500 per year thereafter. Future market values are expected to decline by $1,000. The new machine costs $10,000 and will have operating costs of $2,000 in the first year, increasing by $800 per year thereafter. The expected salvage value is $6,000 after one year and will decline by 15% each following year. The company requires a rate of return of 12%. Find the economic life for each option and determine when the defender should be replaced.

solve using AEC, CR AND OC

do not use excel and show calculations plz