5. (40 points) As a financial manager of a company that produces and sells window glass, you have been recently asked to analyze alternatives to replacing an old furnace. In the glass-making process, before glass is formed, the glass batch-a mix of glass ingredients, which include silicon dioxide, sodium oxide, calcium oxide, and other additives - is melted at high temperature. The process can be both energy and time consuming, depending on the furnace and the volume of production The furnace the company currently uses has been installed 10 years ago at the cost of $1M, and nears the end of its useful life in December this year. After December, it can no longer be operated, because there is no possibility to refurbish it and in any way prolong its useful life. The annual depreciation on the old furnace was $90,000 per year, so at the end of its life it will have book value of $100,000. Unfortunately, there are no buyers for the old furnace and the company has to scrap it The old furnace has been rather inefficient, however. The annual energy cost associated with the furnace has averaged $150,000 per year, and it required six employees to operate it at the annual cost of $40,000 per employee. In addition, the inefficient design of the old furnace required time to heat the glass batch up. The chief operating officer estimated that the inefficiency resulted in productivity loss equivalent to one week worth of delays per year. As regards new furnaces, the company has two alternatives. The first alternative is an electric furnace that costs $800,000 to buy and install. It has a useful life of 6 years. However, due to the relatively high costs of electricity, annual operating costs are estimated to be $250,000 per year in electricity and $40,000 per year in operator salaries. You determined that it is possible