7. The Neater Maid Cleaning Service Company is considering replacing its existing cleaning equipment. The existing equipment cost Rs 100,000 five years ago and was depreciated @ 40% using WDV. The management of Neater Maid estimates the old equipment can be sold for Rs 10,000. The new equipment costs Rs 120,000 and would be depreciated @ 40% using WDV. At the end of five years, Neater Maid's management expects to sell the new equipment for Rs 20,000. The new equipment is more efficient and would reduce expenses by Rs 20,000 per year for the next five years. The marginal tax rate is 30%. Compute the following: i) Net incremental cash flows for the project ii) Compute the NPV and IRR of the project for project acceptance at 10% hurdle 8. The president of Cook Airlines has asked you to evaluate the proposed acquisition of a new jet. The jet's price is Rs 40 million, and it is depreciable @ 20% WDV. The purchase of the jet would require an increase in net working capital of Rs 200,000. The jet would increase the firm's before-tax revenues by Rs 20 million per year but would also increase operating costs by Rs 5 million per year. The jet is expected to be used for three years and then sold for Rs 25 million. The firm's marginal tax rate is 40%. Compute the following: i) Net incremental cash flows for the project ii) Compute the NPV and IRR of the project for project acceptance at 10% hurdle