Problem 1: A small manufacturing firm is considering purchasing a new machine to modernize one of its current production lines. Currently, the two types of machines are available on the market. The service lives of machine A and machine B are 5 years and 7 years, respectively. The firm wants an in-service machine for 6 years. The machines have the expected receipts and disbursements given in the table below: Item First Cost Service Life Estimated Salvage Value Annual 0&M costs Change oil filter every other year (not first yr.) Engine overhaul Assume the salvage value for Machine B is also $1,000 over 6 years The firm always has another option, too: Leasing a machine at $3,000 per year, which is fully maintained by the leasing company, for any number of years. Machine A $6,500 5 years $600 $800 Machine B $8,500 7 years $1,000 $500 None $100 |$200 (every 3rd year) $280 (every 4h year) a) How many options does the firm have in making their decision? List them. b) Disregarding inflation and interest rates, perform a LCCA on this scenario and determine which is the best decision