Atkinson is also considering an investment in a new silk screen labeling machine that can put labels on Alias plastic bottles as part of the manufacturing process. Ralston estimates that the new labeling machine will cost $50,000, and that shipping and installation costs will be $7,500. The addition of the labeling machine will require a $2,000 investment in spare parts inventory at the inception of the project, but these parts can be resold for $2,000 at the project's end. Compared with the manual process that Alias used to use for putting on L labels, Ralston estimates that the new machine will reduce costs by $20,000 per year for 4 25,00 years. The labeling machine will be depreciated over a straight line depreciation for 5-year. At the end of year 4, the equipment will be sold for $5,000. 000 Before making the final calculations and after agreeing on WACC Atkinson and Ralston discuss net present value analysis for the projects they are considering. Ralston tells Atkinson, "when calculating the net present value of the two new projects, we also need to account for the costs expended as a result of researching the project options." Atkinson makes a note on his legal pad and says to Ralston, "There is no need to make any adjustments for inflation in our net present value calculations because inflation is included as part of the expected returns used to calculate our weighted average cost of capital." After their conversation, Ralston and Atkinson prepare their report to present to Alias' CEO. As for WACC the following information will help to find it: The weighted average cost is to be measured by using the following weights: 15% long-term debt, 10% preferred stock, and 75% common stock equity (retained earnings, new common stock, or both). Debt The firm can sell for $450 15year, $500 par-value bond paying annual interest at a 9% coupon rate. A flotation cost of 2% of the par value is required in addition to the discount of $10 per bond. Preferred stock Eight percent (annual dividend) preferred stock having a par value of $300 can be sold for $245. An additional fee of $2 per share must be paid to the underwriters. Common stock The firm's common stock is currently selling for $75 per share. The dividend just paid in the end of last year (2021) is $12 and the rate of growth is 7%. Answer the following questions based on above information. b. Use the discounted payback period to assess the acceptability and relative ranking of project replacement and expansion under assumption that company has required PBP of 4.3 years.(1) c.Calculate WACC (3) d. Assuming equal risk, use the following sophisticated capital budgeting techniques to assess the acceptability of replacement project and expansion: (1) Net present value (NPV). (2) Internal rate of return (IRR) (use internet resources to calculate it).(2) e Summarize the preferences indicated by the techniques used in parts d (1) and (2).Do the projects have conflicting rankings? Is it accurate to use NPV to evaluate acceptance of replacement project in case of machines A and B, why?(4) f. With regard to the conversation between Ralston and Atkinson concerning NPV analysis is Ralston right or Atkinson or both of them? Explain(3)