Part I: The committee chair agrees with you and asks you to come up with a mock case. The information listed below will be given to the candidates.

$(1)$ TPM has an after tax cost of capital of $12\%$; it will pay $9\%$ on any new bank borrowing; the current tax rate is $30\%.$

$(2)$ A new manufacturing technology has just become available. Adopting this new technology requires TPM to upgrade its manufacturing equipment. Compared to the existing technology, the new technology is faster and requires fewer workers but at the same time is less environmentally friendly.

$(3)$ New equipment will have an annual output of $600,000$ ADt of pulp and sell for $$124$ per tonne

$(4)$ The new equipment costs $$75,000,000($will be funded by bank loans$)$ and is expected to last five years with an estimated salvage value of $$15,000,000.$ The new equipment will immediately reduce net working capital $($NWC$)$ by $$12,000,000.$

$(5)$ The new equipment requires $$37,800,000$ fixed cost

$(6)$ Manufacturing pulp using the new equipment incurs the following costs $($per tonne$)$ in addition to the costs stated in $(5)$: labour $$17\mathrm{.}45,$ material $$30\mathrm{.}20,$ variable overhead $$12\mathrm{.}55,$ and fixed overhead $$20\mathrm{.}25.$

Based on the NPV rule, should TPM upgrade to the new technology or continue to operate using its current equipment?