Integrative: Complete Investment decision. Weils Printing is considering the purchase of a nerw printing press. The total instaled cost of the press is $2.15 milion. This outlay woul be paritely oflset by the sale of an exising press. The old press has zero book vabue, cost $1.09 millon 10 yoars ago, and can be sold curtenty for $1.16 milion bofore taxes. As a result of acequibition of the now press, sales in each of the noxt 5 years ece expected to be $1.58 million higher than with the existing press, but product costs (excluding depreciation) will represent 49% of sales. The rew peess wil not affect the firm's net working capital requirements. The new press will be depreciatod under MACRS ising a five-year recovery penod. The firm is subject lo a 40% tax rate Wels Printing's cost of capital is 11.2\%. (Note: Assume that the old and the new presses will each have a terminal value or 50 at the end of year 6. ) a. Determine the intial cash flow required by the new press: b. Detormine the periodic cash inflows attrbutable to the new press. (Note: Be sure to consider the depreciation in year 6.) c. Delermine the payback period. d. Determine the net present value (NPV) and the internal rale of return (IRR) related to the proposed new press. e. Make a recommendation to accept of reject the new press, and justily your antwer. a. Deternine the intial cash flow required by the mew press Calculate the incial cash flow wil be: (Round to the nearest dohae.) b. Determine the periodic cash inflows attributable to the new peess. (Note: Be sure no winsider the depreciation in year 6.) Caloulate the penodic cast intlows atributable to the new press below: (Round to the neavest doliar.) Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes -Inese percentages nave been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. Integrative: Complete Investment decision Wels Printing is considering the purchase of a new peinting pruss. The total installed cost of the press is $2.15 millon. This outiay would be partialy offset by the sale of an exising press. The old press has zero book yille, cost $1.09 milion 10 yeurs ago, and can be sold currenty for $1.16 millon before taves. As a remet of acquisiton of the new press, sales in each of the next 5 years are expected to bo $1.58 milion higher than with the exinting peess, but product costs (excluding deprecaton) wil represent 49% of sales. The new press wil not affect the firm's not working capial requirements. The new press will be depreciated under MACRS using a five-year reconery pericd. The firm is subject to a 40 . tax rate Wells Printing's cost of capital is 11.2\%. (Note: Assume that the old and the new presses will each have a terminar vase of $0 at the end of year 6 ) a. Delermine the initial cash flow required by the new press. b. Determine the perodic cash inflews attributable to the new press. (Note: Be sure to consider the depreciabon in year 6.) c. Determine the payback period. d. Detormine the net present value (NPV) and the internal rate of retum (IRR) related to the proposed new press. e. Make a tecommendation to accept or reject the new press, and juslify your answer. c. Detarmine the paytack period: The payback period for this project is years. (Round to one decimal place.) a. Determine the net present value (NPV) and the internai rase of tebum (IRR) relsted whe proposed new press. The net present value is 3 (Round to the nearest dollar.) The internal rate of retum is (Round to one decimal placo.) e. Make a recommendasion to accept or reject the new press, and justify your answer. (Select from the drop-down menus. Round the NPV amount to the nearest doliar. Round the IfR value to one decimal place.) The NPV is a and the IRR of Nis well the cost of capital of 11.2%. Based on both decision citeria, the project be accepted