Problem 8 Your office is about to purchase a new machine at a cost of $64,000. You have forecast the following data relating to the salvage value and maintenance costs over the next five years. Year Salvage value at the end of each year ($) Annual maintenance expense ($) 12345 50,000 40,000 30,000 23,000 3,500 11,000 13,000 18,000 24,000 28,000 Assume that the firm has a 28% tax rate and a 15% p.a. required return on this project, and use straight-line depreciation. Should the office replace a machine every year, or every three years, or every five years?