AFF 210 Problem Set Two Winter 2022 Problem Three (20 marks) ABC is debating the purchase of a new digital printer. The printer they acquired 3 years ago for $1,800,000 is worth $1,200,000 today and will have a salvage value of $340,000 after 6 more years. The printer generates revenues of $660,000 per year. The costs of operating the printer are $340,000 per year. The company currently has $80,000 invested in operating net working capital. The investment in operating net working capital will remain at this level for the remaining 6 years of the project The new printer will cost $2,430,000. It will cost $120,000 to install the new printer. The new printer will generate revenues of $1,140,000 per year. In addition, the costs of operating the new printer will be $460,000 per year. The company will have to increase its investment in operating net working capital to $125,000 at time zero. Thereafter, operating net working capital will increase by $15,000 per year until the end of the project. At the end of 6 years, the new machine will have a salvage value of $520,000. The company's corporate tax rate is 34%, the CCA rate is 30% and the required rate of return is 8%. Assume the asset class remains open. Using net present value (NPV) calculation, determine if the company should purchase the new printer. Show all work