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Consider a machine that has an initial cost of $126,000 and an estimated salvage value of...

Consider a machine that has an initial cost of $126,000 and an estimated salvage value of $27,000. After some analysis, we conclude that this machine will have O&M costs of $1,850 per year but based on the faulty nature of this machine we will have to incur major maintenance costs at the end of year 3 and year 6. During year 3 we expect to pay $14,000 and for year 6 we estimate a $16,500. The machine will have a useful life of 8 years and we will use an interest rate of 6%. Use annual cash flow analysis.

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