Which of the following techniques would you use to determine the cost effectiveness of a new production machine, amortized over 5 years of expected useful life ? Current warranty costs are…

Which of the following techniques would you use to determine the cost effectiveness of a new production machine, amortized over 5 years of expected useful life ? Current warranty costs are $50,000/year for this production line. The new machine plus associated costs will require a $150,000 investment, but warranty costs are projected to drop to $30,000/year. Consider that administrative overhead is 25%, the profit coefficient is 8%, and present worth is subject to 5% discounting.