A-1 Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2018, A-1 Chips expects to deliver 525 prototype chips at an average price of $100,000. A-1 Chips' marketing vice president forecasts growth of 50 prototype chips per year through 2024. That is, demand will be 525 in 2018, 575 in 2019, 625 in 2020, and so on. (Click the icon to view additional information.) E: (Click the icon to view the data on the two options available and additional information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Read the requirements. Future Value of Annuity of $1 table Requirement 1. Calculate the cash inflows and outflows of the modernize and replace alternatives over the 2018 - 2024 period. First, determine the cash inflows and outflows of the modernize alternative over the 2018 to 2024 period. (Use a minus sign or parentheses for a cash outflows. If a box is not used in the table, leave that box empty, do not enter a zero.) Units Net cash Initial Proceeds from Year sold contributions investments sale of equipment Jan 1, 2018 Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 More Info The plant cannot produce more than 495 prototype chips annually. To meet future demand, A-1 Chips must either modernize the plant or replace it. The old equipment is fully depreciated and can be sold for $4,400,000 if the plant is replaced. If the plant is modernized, the costs to modernize it are to be capitalized and depreciated over the useful life of the updated plant. The old equipment is retained as part of the modernize alternative. The following data on the two options are available: Print Done Data Table Modernize Replace Initial investment in 2018 $ $ 34,800,000 $ 6,600,000 $ 66,300,000 16,800,000 Terminal disposal value in 2024 Useful life 7 years 7 years Total annual cash operating cost per prototype chip $ 83,000 $ 73,000 A-1 Chips uses straight-line depreciation, assuming zero terminal disposal value. For simplicity, we assume no change in prices or costs in future years. The investment will be made at the beginning of 2018, and all transactions thereafter occur on the last day of the year. A-1 Chips' required rate of return is 10%. There is no difference between the modernize and replace alternatives in terms of required working capital. A-1 Chips has a special waiver on income taxes until 2024. A Requirements 1. Calculate the cash inflows and outflows of the modernize and replace alternatives over the 2018 - 2024 period. 2. Calculate payback period for the modernize and replace alternatives. 3. Calculate net present value of the modernize and replace alternatives. What factors should A-1 Chips consider in choosing between the alternatives