Capital Budgeting (1) MSM Company is planning an upgrade to its warehouse. The upgrade involves computerizing many of the material handling activities. The cost of the upgrade is expected to be $3,500,000. The equipment falls into the 7 year IRS depreciation range (use straight line full year every year) and is expected to provide annual cash cost savings and other annual cash benefits totaling $900,000. At the end of year 3 a one-time fully tax deductible software upgrade of $45,000 will be made. This upgrade is fully tax deductible in year 3. MSM is in the 35% tax bracket and has decided to use a 12% hurdle rate, as a first pass, to examine the financial viability of the proposed project. At the end of year 6 the used equipment is expected to be sold for $420,000. (1) Prepare a well-organized schedule that concludes with the calculation of the expected NPV from this project. (2) Is the Internal Rate of Return above or below the 12% hurdle