By using Excel Calculate the following

4. (25 points) Metallic Peripherals, Inc. has received a production contract for a new product. The contract lasts for 8 years. To do the necessary machining operations, the firm can use its own CNC mill, which was purchased 4 years ago at a cost of $450,000. Today the CNC mill can be sold for $75,000. In 8 years the CNC will have a $25,000 salvage value. Annual O&M costs for the CNC are $26,000/year. If the firm uses its own CNC mill it must also purchase an additional one at a cost of $200,000, its value in 8 years will be $40,000. The new lathe O&M costs are $7,500/year. As an alternative, the presently owned CNC mill can be traded in for $80,000 and a new CNC mill of larger capacity purchased for a cost of $500,000; its value in 8 years is estimated to be $100,000, and its annual O&M costs $12,000/year. The new machine will be acquired with 50% companys own money and the rest financed with a loan to be repaid in 5 equal total annual payments at a rate of 8%. All the CNC mills are MACRS-GDS 7-year property class, the company has a 25% tax rate, and uses a 10% MARR. Clearly show the ATCF profile for each alternative

a) Using an EUAC comparison, a planning horizon of 8 years, and the insider cash flow approach, decide which is the more favorable alternative.

b) Using an EUAC, the insider approach, and assuming that Section 1031 like-kind property exchange is used, determine the more favorable alternative.