NPV and EAC for these alternatives. if the selected engine was not replaced till 10 years, which alternative should be adopted?

Identify and discuss with supporting analysis, if the selected engine was not replaced until 10 years, which alternative should be adopted?

Alternative 1 - Purchase second-hand Engine for $ 178,180

Costs associated with overhaul and reconditioning $155,000

Post operating costs per annum: $625,000

Trade-In Value 10 years $20.000

Alternative 2 - Purchase NEW Engine for $ 930,000. (50% of the payment for the engine to be made immediately with the balance due in annual increments of $155,000 in years 1, 2 and 3) and it will cost $25,000 to have the engine integrated (Payment immediately)

Post operating costs per annum: $485,000

Insurance costs will be $70,000 in year 1 but are expected to reduce by 5% each year

Trade-In Value 10 years $180000

Discount Rate 11%