Pacman Plastics is considering a change in producing a specialized part used in many Pacman products. Pacman sees a need for 200,000 parts per year over the foreseeable future. The part is currently made on a molding machine that is now 3 years old and could be used for another 5 years, It cost P160,000 new, was to last 8 years, and would have a salvage value of P15,000. It is now worth P75,000 on the used equipment market. A new machine will improve the operation by reducing scrap, its increased tolerances (requiring less maintenance), and automatically packing the finished units. It will cost P275,000, have a useful life of 5 years, and have a P25,000 salvage value. The comparative cash operating expenses are: Assume that the straight-line depreciation is used and that a tax rate of 30% is applicable to all incremental gains, losses, and taxable income. Cost of capital is estimated to be 14% REQUIRED: 1. Find the relevant cash flows for the molding machine replacement decision. Use the following table to guide you: 2. Using the NPV method, should the new molding machine be acquired? 3. Find the internal rate of return, the payback period, and the accounting rate of return. Exercise 6-15 By replacing a new equipment with a more efficient equipment, Willie Company estimates that cash operating costs can be reduced by P65,000 a year. In addition sales volume can be increased resulting in a larger contribution margin of P25,000 a year without considering the cost savings from improved efficiency. Depreciation of P50,000 per year is to be taken on the new equipment. Depreciation on the present equipment is P10,000 per year. The income tax rate is 30%. REQUIRED: 1. What will be the incremental annual cash inflow net of income tax for each year on this investment situation