Curly Ramen Pte Ltd is a factory that manufactures instant noodles. The company has completed a research exercise amounting to $5,200 to improve its production process. Due to the outcome of the research, it is now considering purchasing new machines to replace its older machines. The new machines will cost $290,000 altogether, and incur an additional installation expense of $10,000. The old machines can be sold now for a proceed of $51,000, but required a disposal fee of $1,000. The table below shows the cash revenue and expenses for the existing machines:

Year	cash revenue	Cash expenses
1	300,000	200,000
2	400,000	320,000
3	500,000	440,000

The cost of capital for the company is 4%.

Required: a. Calculate the initial investment for the proposed machines.

b. It is estimated that the new machines are expected to increase cash revenue by 35% and expenses by 10% respectively. Calculate the following: i. Operating cash inflows for the existing machines. ii. Operating cash inflows for the proposed new machines. iii. Incremental cash flows for the project.

c. i. Calculate the Net Present Value for the proposed project. ii. Should the company continue to operate the old machine or purchase the new machine? State your reason.

d. i. Explain what is sunk cost and its relevance to investment decisions. ii. Identify a sunk cost from the case above.

e. If the Internal Rate of Return (IRR) for the project is 9%, should the company accept or reject the project solely based on the IRR technique? State your reason.