2) A bicycle manufacturer currently produces 357,000 units a year and expects output levels to remain steady in the future. It buys chains from an outside supplier at a price 15.000chains rather than buy them. Direct in-house production costs are estimated to be only $1.50 per chain. The necessary machinery would cost $272,000 and would be obsolete after 10 years. This investment could be depreciated to zero for tax purposes using a 10-year straight-line depreciation schedule. The plant manager estimates that the operation would require $50,000 of inventory and other working capital upfront (year o), but argues that this sum can be ignored since it is recoverable at the end of the 10 years. Expected proceeds from scrapping the machinery after 10 years are $20,400. (Note: depreciation charge will be based on a reduction to zero in the value of the machinery over 10 years. The scrap proceeds will be a cash inflow for FCF purposes and there is tax due on those cash proceeds at a rate of 35%).- a If the company pays tax at a rate of 35% and the opportunity cost of capital is 15%, what is the net present value of the decision to produce the chains in-house instead of purchasing them from the supplier