I am most confused with the bonus than anything

Philadelphia Fastener Corporation manufactures nails, screws, bolts, and other fasteners. Management is considering a proposal to acquire new material-handling equipment. The new equipment has the same capacity as the current equipment but will provide operating efficiencies in labor and power usage. The savings in operating costs are estimated at $150,000 annually The new equipment will cost $300,000 and will be purchased at the beginning of the year when the project is started. The equipment dealer is certain that the equipment will be operational during the second quarter of the year it is installed. Therefore, 60 percent of the estimated annual savings can be obtained in the first year. The company will incur a one-time expense of $30,000 to transfer production activities from the old equipment to the new equipment. No loss of sales will occur, however, because the processing facility is large enough to install the new equipment without interfering with the operations of the current equipment. The equipment is in the MACRS 7-year property class. The firm would depreciate the machinery in accordance with the MACRS depreciation schedule The current equipment has been fully depreciated. Management has reviewed its condition and has concluded that it can be used an additional eight years. The company would receive $10,000, net of removal costs, if it elected to buy the new equipment and dispose of its current equipment at this time. The new equipment will have no salvage value at the end of its life. The company is subject to a 40 percent income-tax rate and requires an after-tax return of at least 12 percent on any investment Required: 1. Calculate the annual incremental after-tax cash flows for Philadelphia Fastener Corporation's proposal to acquire the new equipment 2. Calculate the net present value of the proposal to acquire the new equipment using the cash flows calculated in requirement (1), and indicate what action management should take. Assume all cash flows take place at the end of the year. i. The Senior Operations VP (SOVP) of Philadelphia Fastener Corporation (PFC) has asked you to review a prospective acquisition and provide a capital investment recommendation. It is expected that your recommendation includes supporting analysis ii. Should PFC purchase the new material-handling equipment? iii. How sensitive is your recommendation to the equipment dealers estimate of annual savings; 60 percent (i.e., what-if the savings turns out to be 80 percent or 40 percent)? iv. How sensitive is your recommendation to the estimated disposal proceeds from the sale of the old equipment (i.e., what-if instead of a positive $10,000 PFC broke-even or worse had to pay an additional $10,000 for disposal and removal)? v. Any other recommendations or issues you would like to raise to the SOVP. vi. BONUS: (10 points) PFC requires investments to provide an ROI of at least 12 percent. The current SOVP inherited the ROI hurdle rate and is more interested in IRR and MIRR as indicators of actual return. You can decide to impress the SoVP with your capital budgeting talent and provide the investments IRR and MIRR (Five bonus points for IRR and MIRR for a total of 10 possible points)