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Problem 2 The TT Racing and Performance Motor Corporation wishes to evaluate two alternative machines...

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Accounting

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Problem 2 The TT Racing and Performance Motor Corporation wishes to evaluate two alternative machines for NASCAR motor tune-ups. The MARR adopted by TT Racing is 14.3 %. The two guesses for the RORs are : 14% and 15% Machine Machine S -145000 -80,000 - 16000 |-28000 Initial cost, Annual operating and maintenance cost, $ per year Annual revenue, $ per year Salvage value, $ Life, years $1000 61,000 20,000 35,000 10 a) Construct the Incremental Cash Flow Diagram b) Determine the Incremental Annual Worth cash flow equation. c) Using incremental annual worth cash flow equation for the incremental rate of return analysis, select which machine (R or S) will be the best option

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