7. Nishat Company, a manufacturer of sports and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. (POINTS:20] The following information is given: Facts Existing Machine Proposed Machine Cost=Rs.100,000 Cost=Rs.150,000 Purchased 2 years ago Installation=Rs.20,000 Depreciation using MACRS over a 5-year Depreciation using MACRS over a 5-year recovery schedule recovery schedule Current market value=Rs.105,000 Five-year usable life remaining Five-year usable life expected Earnings before Depreciation and Taxes Existing Machine Proposed Machine Year Year 1 Rs. 160,000 1 Rs. 170,000 2 Rs. 150,000 2 Rs. 170,000 3 Rs. 140,000 3 Rs. 170,000 4 Rs. 140,000 4 Rs. 170,000 5 Rs. 140,000 5 Rs. 170,000 Nishath pays 40% taxes on ordinary income and capital gains. i) Summarize the incremental after-tax cash flow (relevant cash flows) for years t = 0 through t = 5. ii) Given 15% cost of capital, Compute the net present value. Should the project be accepted