Instructions: The Woodrutt Corporation purchased a piece of equipment three years ago for $265,000. It has an asset depreciation range (ADR) midpoint of eight years. The old equipment can be sold for $82,000. A new piece of equipment can be purchased for $327,000. It also has an ADR of eight years. Additionally, the firm has the option to spend $20,000 to overtaul and repair the old equipment; assume that if they do so, the operating cash flows for the old machine below will be $5,000 higher in each year but there are no other changes. Assume the old and new equipment would provide the following operating cash flows over the next six years: Question: The firm has a 2.5 percent tax rate and a 8.25% cost of capital. Should the new equipment be purchased to replace the old Quertion: The firm has a 25 percent tax rate and a 8.25% cost of equipment? Should the firm fix the existing equipment instead? Show your calculations and explain your answer. Note that you may not need all of the information provided. Year123456NewEquipment$72,00072,00066,00059,00053,00050,000(6,000)OldEquipment$21,00011,0008,0006,0004,000