Modern Industries, Inc. offers precision machining services. The company is considering the purchase of a new machine. The invoice price of the machine is $$140,000,$ freight charges are estimated to be $$4,000,$ and installation costs are expected to be $$6,000.$ The salvage value of the new equipment is expected to be zero after a useful life of $5$ years. Existing equipment could be retained and used for an additional $5$ years if the new machine is not purchased. At that time, the salvage value of the equipment would be zero. If the new machine is purchased now, the existing machine would have to be scrapped. The company accountants have gathered the following data regarding annual sales and expenses with and without the new machine: $1.$ Without the new machine, Modern Industries can sell $12,000$ units of product annually at a per unit selling price of $$100.$ If the new machine is purchased, the number of units produced and sold would increase by $10\%,$ and the selling price would remain the same. $2.$ The new machine is faster than the old machine, and it is more efficient in its usage of materials. With the old machine the gross profit rate will be $25\%$ of sales, whereas the rate will be $30\%$ of sales with the new machine. $3.$ Annual selling expenses are $$180,000$ with the current equipment. Because the new equipment would produce a greater number of units to be sold, annual selling expenses are expected to increase by $10\%$ if it is purchased. $4.$ Annual administrative expenses are expected to be $$100,000$ with the old machine, and $$113,000$ with the new machine. $5.$ The current book value of the existing machine is $$36,000.$ Modern Industries uses straight$-$line depreciation.The President has asked the accounting team for a briefing, including analyses and recommendations. REQUIREMENTS: a$.$ Present the scenario. b$.$ Prepare an incremental analysis for the $5$ years. Concisely discuss the analysis. $($Ignore income tax effects.$)$ c$.$ Based on the analysis make a recommendation as to whether the company should keep the existing machine or buy the new machine. D$.$ Perform calculations in Excel and insert formatted work into presentation. e$)$ Provide a summary and a clear recommendation to address the issue.