How to solve according to malaysian university finance standard formula

QUESTION $3$

LunaTech Inc. is currently utilizing the Astra processor, acquired $9$ years ago with $2$ years of

remaining useful life. LunaTech is evaluating a proposal by the production department to

replace the Astra processor with the more advanced Nebula processor to meet future market

demand. The Nebula processor can be purchased at RM$2,202,202$ and has a useful life of $7$

years. Upon completion of its useful life, the Nebula processor can be sold for RM$99,789,$ but

an additional RM$34,404$ is required for modifications.

Considering the enhanced efficiency of the Nebula processor, LunaTech anticipates additional

raw material costs of RM$61,616$ and an increase in payables by RM$49,494.$ Sales are

expected to rise by RM$500,500$ annually. However, increase in production costs are estimated

at RM$65,065$ while the defect costs expected to decrease by RM$26,000$ per year. Additionally,

LunaTech plans to reduce production labour costs by RM$55,555$ annually.

The Astra processor was purchased for RM$439,439$ and has an expected salvage value of

RM$54,562.$ If LunaTech decides to sell the Astra processor now, it can fetch RM$87,859.$ All

non$-$current assets are depreciated using the straight$-$line method. The corporate tax rate is

$27\%,$ and the required rate of return is $8\%.$

Required:

Assess the following after$-$tax cash flows attributable to the Nebula processor:

a$.$ Initial outlay.

$(14$ marks$)$

b$.$ Differential cash flow.

$(10$ marks$)$

c$.$ Terminal cash flow.

$(4$ marks$)$

d$.$ Net present value

$(5$ marks$)$

e$.$ Internal rate of return

$(5$ marks$)$

f$.$ Should LunaTech Inc. invest in the Nebula processor? Justify your decision.

$(2$ marks$)$