It is December and you have just been hired as an accountant by the Sweetwater Candy Company operating in Fort Collins. Sweetwater is a boutique candy maker that produces only one specialty product: boxes of assorted chocolates that include a regional favorite using Colorado peaches for the filling. These chocolates have become favorites of locals and tourists. The Sweetwater Candy Company produces its chocoates at a small facility in Fort Collins Sweetwater sells each unit for $25 per box. (1 unit = 1 box of chocolates) You have been asked to get involved with the budget preparation for next year and to use the information to make decisions. The budget process is already underway, and the accounting team has worked with the sales and marketing team to develop the following sales budget for next year: $25.00 Selling price per unit Units Dollar Sales January 1,200 $30,000 February 1,000 $25,000 March 1,600 $40,000 April 1,400 $ 35,000 May 1,800 $ 45,000 June July 2,500 $ 62,500 3,500 $87,500 August 3,000 $75,000 September 2,700 $67,500 October November 2,000 $50,000 1,800 $ 45,000 December Total Annual Sales 2,500 $ 62,500 25,000 $625,000 Work through the worksheets in this Excel workbook to complete the required calculations and analyses. Provide explanations as instructed. While preparing its budget for the second quarter, as part of its expansion plan, the Sweetwater Candy Company is planning for a capital expenditure on new equipment in April. To determine how much that expenditure will be, you must evaluate the following two options. Option #1: Keep old equipment and overhaul it. If the company keeps and overhauls its old equipment, it will be used for five more years and then discarded (no salvage value). Option #2: Buy new equipment and sell the old equipment. If new equipment is purchased now, it will be used for 10 years, after which it will be traded in at its salvage value for another new piece of equipment. The new equipment would cost less to operate resulting in an increase in expected annual cash flows, as shown below. The old equipment would be sold now at its salvage value. Management requires investments to have a payback period of 5 years, and it requires a 16% return on its investments. The company has assembled the following information: Purchase cost now Cost of Old Equipment New Equipment N/A $50,000 overhaul needed now $18,000 N/A Annual expected cash flows generated $5,500 $8,500 Salvage value now $3,000 N/A Salvage value in ten years N/A $6,000 Required: (A.) Calculate the Payback Period, Net Present Value, and Internal Rate of Return for the two options. (B.) Which investment should the company choose? Explain.