Homework 3 1. Is the next statement true or false?: "A company with a higher MARR will be willing to pay less for equipment that will provide savings in costs, than a company with a lower MARR for the same equipment." Explain why. 2. What is the maximum price you would pay to buy a running business that needs to renew its equipment at a cost of $5,000,000, has annual revenues of $2,000,000, annual expenses of $1,500,000, and can be sold after 6 years in $10,000,000? Use a MARR of 15%. 3. Minor maintenance costs for a certain machine are expected to be $5,000 per year during the first 5 years, and $6,000 per year during the last 7 years of its 12 year useful life. Major maintenance with a cost of $15,000 is needed at year 6. How much is the total annual equivalent maintenance cost for this machine if the MARR is 18% per year. 4. Calculate the discounted payback period of a project with an initial investment of $1,500,000, a salvage value of $200,000 and the following expected profits: $250,000 in year 1, $400,000 in years 2 and 3, and $500,000 in years 4 to 8. Use a MARR of 15%