Philadelphia Fastener Corporation manufactures nails, screws, bolts, and other fasteners. Management is considering a proposal to ocquire new material-handling equipment. The new equipment has the same capacity as the current equipment but wil provide operating efficiencies in labor and power usage. The sovings in operating costs are estimated at $150,000 annually. The new equipment will cost $300,000 and will be purchased at the beginning of the year when the project is started. The equipment dealer is certain that the equipment will be operational duting the second quarter of the year it is installed. Therefore, 60 percent of the estimated annual savings can be obtained in the first yoat. The company will incur a one-time expense of $30,000 to transfer production activities from the old equipment to the new equipment. No loss of soles will occur, however, because the processing facility is large enough to instoli the new equipment without interfering with the operations of the current equipment. The equipment is in the MACRS 7-year property class. The firm would depreciate the machinery in accordance with the MACRS depreciation schedule. The current equipment has been fully depreciated. Management hos reviewed its condition and has concluded that it can be used an additional eight years. The company would receive $10,000, net of removal costs, If it elected to buy the new equipment and dispose of its current equipment at this time. The new equipment will have no salvage value at the end of its life. The company is subject to a 30 percent income-tax rate and requires an after-tax return of at least 12 percent on any investment. Use Appendx. A and Exhibit 16-9 for your reference. (Use appropriate foctor(s) from the tables provided.) Required: 1. Caiculate the annual incremental after-tax cash flows for Philodelphla Fastener Corporation's proposal to acquire the new equipenent. 2 -a. Colculote the net present value of the proposal to acquire the new equipment wing the cash flows caiculated in requirement 1. Assume all cash flows take place at the end of the year. 2-b. Should manogement purchase the new equipment? Complete this question by entering your answers in the tabs below