"An industrial engineer proposed the purchase of scanning equipment for the company's warehouse. The engineer felt that the purchase would provide a better system of locating cartons in the warehouse by recording the locations of the cartons and storing the data in the computer. The estimated investment, annual operating and maintenance costs and expected annual savings are as follows: Cost of equipment and installation: $80.000 - Project life: 6 years - Expected salvage value: $15,000 Investment in working capital (fully recoverable at the end of the project life): $7.000 Expected annual savings on labour and materials: $72.200 - Expected annual expenses: $16.200 - CCA rate: 30% The firm's marginal tax rate is 26% 0 1 2 3 4 5 on 6 Year Income Statement Revenues S Same as in year 1 Same as in year 1 Same as in year 1 Same as in year 1 Same as in year 1 Expenses S Same as in year 1 Same as in year 1 Same as in year 1 Same as in year 1 Same as in year 1 CCA S S 5 $9996.00 S6997.20 $4898.04 Taxable income S S $ $46004.00 As calculated As calculated Income taxes S S $ As calculated $12740.73 As calculated Net Income S S $ As calculated As calculated $37815.45 Cash Flow Statement Operating activities Net Income CCA Investment activities As calculated As calculated As calculated As calculated As calculated As calculated As calculated As calculated As calculated As calculated As calculated As calculated Machines S $ Working capital Disposal tax effect Net Cash Flow (ATCF) . S +5 +$ +S $ i - $ +$ (b) The Net Present Value at MARR=21% for this investment is (c) The IRR for this investment is % (d) At MARR=21%, the project should be