Part I{1IIII marks): The committee chair agrees with you and asks you to come up wii 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 312%. (2)13; new manufacturing technology has just become available. Adopting this new technology requires "RM to upgrade its manufacturing equipment. Compared to the existing technology, the new technology is faster and requires fewer workers but at the same me is less environmentally friendly. {3] The current pulp mill equipment has an annual output of Sr air dried tonnes {ADt} of pulp which currently sel]s at $121 per tonne. In contrast the new equipment will have an annual ouiput of E ADt of pulp. [4] The current equipment was purchased three years ago for $49,D-i},tl. It has a book value of $28,DD,CHJD and another four years of life remaining with no salvage value. It can be sold on the secondary market today for $ll,tl'|II-D,UDD. The new equipment costs HSJDD- {will be funded by bank loans] and is expected to last five years with an estimated salvage