Please answer it carefully not just explanation of how to do it$,$ thankyou

Banana plc is examining the possibility of replacing an existing machine with a new high$-$

speed machine to produce the same product. The existing machine was purchased $5$ years ago

at a cost of $40,000,$ and is being depreciated straight$-$line to zero over its $8-$year useful life.

The old machine has an estimated market value of $4,000$ at the end of its useful life if it is not

replaced, and will be sold to another company immediately at $10,000$ if it is replaced.

The new high$-$speed machine will cost $60,000$ and has a $3-$year useful life. It will be

depreciated straight$-$line to zero over $3$ years. Over its life, it will reduce labour and raw material

usage sufficiently to cut annual operating costs from $85,000$ to $60,000.$ The new machine

will lead to a one$-$time increase in the net working capital by $10,000$ at the time of

replacement. All working capital will be recovered when the project ends. The new machine will

begin operations immediately after the replacement is made, and the operating cash flows will

occur at the end of each year. Assume the tax rate is $25$ percent.

$($a$)$ What terminal selling price of new machine in year $3$ is required for a $15$ percent internal

rate of return on the Banana's replacement project?

$(12$ marks$)$

$($b$)$ Explain the reasons for converting accounting profit to cash flows in capital budgeting and

the areas where accounting profit need to be adjusted.

$(6$ marks$)$

$($c$)$ Comment on the following statement: If using Constant Dividend Growth Model $($CDGM$)$

and SML method $($CAPM$)$ generate two different estimates for cost of equity, it means at least

one estimate for the cost of equity is wrong.

$(7$ marks$)$Banana plc