Expert Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2021, Expert Chips expects to deliver 555 prototype chips at an average price of $55,000. Expert Chips' marketing vice president forecasts growth of 100 prototype chips per year through 2027. That is, demand will be 555 in 2021. 655 in 2022. 75,5 in 2022. and so on. (Click the icon to view additional information.) The following data on the two options are available: Data Table (Click the icon to view the data on the two options available and additional information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table $1 Future Value Read the requirements Modernize Replace Initial investment in 2021 $ 36,800,000 $ 64,500,000 Requirement 1. Calculate the cash inflows and outflows of the modernize" and "replace" alternatives over Terminal disposal value in 2027 $ 6,500,000 $ 17,300,000 First, determine the cash inflows and outflows of the "modernize" alternative over the 2021 to 2027 period. Useful life 7 years 7 7 years field empty, do not enter a zero.) . Total annual cash operating cost per prototype chip $ 36,500 S 28,000 Units Net cash Initial Proceeds from Expert Chips uses straight-line depreciation, assuming zero terminal disposal value. For simplicity, we Year sold contributions assume no change in prices or costs in future years. The investment will be made at the beginning of investments sale of equipment 2021, and all transactions thereafter occur on the last day of the year. Expert Chips' required rate of Jan 1, 2021 return is 8%. There is no difference between the "modernize" and "replace alternatives in terms of required working capital. Expert Chips has a special waiver on income taxes until 2027 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 , Dec 31, 2024 Print Done Dec 31, 2025 Dec 31, 2026 The plant cannot produce more than 525 prototype chips annually. To meet future demand, Expert Chips must either modernize the plant or replace it. The old Enter any number in the edit fields and then click Check Answer. equipment is fully depreciated and can be sold for $3,700,000 if the plant is replaced. If the plant is modernized, the costs to modernize it are to be capitalized Help Me Solve This e Text Pages and depreciated over the useful life of the modernized plant. The old equipment is Get More Help retained as part of the "modemize" alternative