A. You are operating an old machine that is expected to produce a cash inflow of $6,200 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $21,200 but is much more efficient and will provide a cash flow of $11,800 a year for 4 years.

Calculate the equivalent annual cost of the new machine if the discount rate is 16%.

A forklift will last for only 2 more years. It costs $5,500 a year to maintain. For $25,000 you can buy a new lift that can last for 15 years and should require maintenance costs of only $2,500 a year.

b-1.Calculate the equivalent cost of owning and operating the forklift if the discount rate is 4% per year.(Do not round intermediate calculations. Round your answer to 2 decimal places.)

b-2.Calculate the equivalent cost of owning and operating the forklift if the discount rate is 12% per year.(Do not round intermediate calculations. Round your answer to 2 decimal places.)