Use formulas to complete the problem and show the used formulas; thank you.

fx =E11*(1+$E$7)^5+E12*(1+$E$7)^5 a Using equivalent annual cost to compare equipment replacement options A B D E F G H 1 J K 1 2 3 4 5 A business can continue to use a machine that costs $ 7,900.00 per year in operating and maintenance costs today. In 5 years the old machine will be worthless and will be replaced. Alternatively, the company can purchase a new more efficient machine today for $ 11,500.00 that today costs $ 4,500.00 per year in operating and maintenance. The new machine will last 10 years with a salvage value of zero. The company's cost of capital is 12.3% The rate of inflation is exected to be 2.0% per year Which option should the firm choose; explain your answer. 6 7 8 9 10 11 12 13 14 15 Year 16 17 18 Old Machine New Machine Purchase cost= NA $ 11,500.00 Annual operating cost today= $ 7,900.00 $ 4,500.00 Time horizon 5 10 Cost of capital 12.3% Cash flows 1 2 3 4 5 61 $ 17,665.29 7 8 9 10 Equivalent annual cost= Type your answer here 19 20 21 22 23 24 25 26 27 28 fx =E11*(1+$E$7)^5+E12*(1+$E$7)^5 a Using equivalent annual cost to compare equipment replacement options A B D E F G H 1 J K 1 2 3 4 5 A business can continue to use a machine that costs $ 7,900.00 per year in operating and maintenance costs today. In 5 years the old machine will be worthless and will be replaced. Alternatively, the company can purchase a new more efficient machine today for $ 11,500.00 that today costs $ 4,500.00 per year in operating and maintenance. The new machine will last 10 years with a salvage value of zero. The company's cost of capital is 12.3% The rate of inflation is exected to be 2.0% per year Which option should the firm choose; explain your answer. 6 7 8 9 10 11 12 13 14 15 Year 16 17 18 Old Machine New Machine Purchase cost= NA $ 11,500.00 Annual operating cost today= $ 7,900.00 $ 4,500.00 Time horizon 5 10 Cost of capital 12.3% Cash flows 1 2 3 4 5 61 $ 17,665.29 7 8 9 10 Equivalent annual cost= Type your answer here 19 20 21 22 23 24 25 26 27 28