le.php/72076/modrosource/content/0/E%2022 Question 3 Komatsu Cutting Technologies is considering replacing one of its CNC machines with one that is newer and more efficient. The firm purchased the CNC machine 8 years ago at a cost of $140,000. The machine had an expected economic service life of 10 years at the time of purchase and an expected salvage value of $15,000 at the end of the 10 years. The original salvage estimate is still good, and the machine has a remaining economic service life of two years. The firm can sell this old machine now to another firm in the industry for $25,000. The new machine can be purchased for $150,000, including installation costs. it has an estimated economic service life of eight years. The new machine is expected to reduce cash operating expenses by $25,000 per year over its eight year life, at the end of which the machine is estimated to be worth only S4.000. The company has a MARR of 12% a) What is the equivalent annual cost of retaining the old machine for two more years? b) What is the equivalent annual cost of purchasing the new machine and using for 8 years? c) If the firm needs the service of these machines for an indefinite period and no technology improvement is expected in future machines, what will be your decision? Would you keep the old machine or replace it with the new one now