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Compare the two scenarios for acquiring a machine for a project for 22 years expected operations,...

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Accounting

Compare the two scenarios for acquiring a machine for a projectfor 22 years expected operations, at a company with an internalrate of return of i = 16%. Using PW, find which scenario is better.Scenario 1. Buy an initial small machine at $13,000, it cost$2,400/year to run for the first 12 years, buy a second largermachine at $26,000 and run it for 10 years at a cost of$4,000/year. There is no salvage value at the end of service foreither machine. Scenario 2. Buy a large machine for $36,000 and runit for 22 years at a cost of $1,000/year. At the end of the 22years, the machine is assumed to have a salvage value of$5,000.

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