Name (ri Problem 100 poin) Recommended Time: 40 minutes. Score: ing acquiring new machine to produce powdered milk used in baby Adler industries in contemp mals There is great demand for the product due to the shortage, so a decision must be reached quickly The cost of the machine is $2,850,000. The equipment's estimated useful life is ten years, depreciated straight-line, with a $40,000 salvage value. The cost of annual maintenance, $66,000, the annual salary of hiring of a maintenance technician who has expertise in the machine, $50,000 a modest engine overhaul is expected in year six, $16,000. There are additional anal electricity costs of $38,000. Cost of goods sold is estimated to be $300,000 ach year, while annual sales are estimated at $924,000. The discount rate is 12 percent. The discount tables are provided below: 12% PV of St PV of OA 12% 10.89286 10.89286 2 079719 2 1.69005 3 0.71178 3 240183 4 0.63552 4 3.03735) 5 0.56743 S 3.60478 6 0.50663 6 4.11141 7 0.45235 7 4.56376 8 0.40388 8 4.96764 9 0.36061 9 5.32825 10 0.32197 10 5.65022 Instructions: L. 1. Calculate annual cash flows. 2. Compute the net present value (NPV) of this proposal. 3. Briefly explain to Ms. Englar, the CFO, what you recommend regarding this proposal. Note: Ms. Englar does not want "accept" or "reject" as the only response. Round your answer to the nearest dollar. Show your calculations labeled and in good form to receive credit. A proper heading is required. II. Explain how a cost is treated in a few sentences (capitalize vs. expense). The question is required to be answered or Problem I, or part I will not be graded.