Please solve this question in detail.

You are an external capital budgeting advisor to a highly successful manufacturing firm. You have recently received a proposal for equipment replacement that will presumably lead to more capacity and less cost The replacement details are given below Old Equipment Current book value Current market value New Equipment S 400,000 600,000 Acquisition cost 10 5 1,000,000 Remaining lite wrs) Life lyrs.) 10 450,D00 150,000 Annual sales 300,000 Annual sales S S 120,000Cash operting150,000 40,000 Annual depreciation 100,000 Cash operating expenses expenses Annual depreciation Accounting salvage vaue 0 Accounting salvage $ S 100,000 Expected salvage200,000 value Expected salvage value value If the new equipment replaces the old equipment, an additional investment of $80,000 in net working capital will be required. The tax rate is 30% and the required rate of return is 10%. As you work through the NPV and IRR analysis pravided by the company, you discover the following errors The initial outlay correctly accounts for incremental investment in new fixed capital and net . working capital but after-tax cash proceeds from the sale of old fixed capital are not adjusted .Annual operating cashflows are not adjusted for tax and do not add back depreciation. Terminal year after-tax non-operating cashflows do not account for recapturing of investment in net working capital. Also, incremental capital gains on salvage value are not taxed You realize that you need to do the entire project feasibility report from scratch. You set out to do the following Ja) calculate the initial outlay, after-tax operating cashflows, and terminal year after-tax non- b) present these cashflows in a tabular format indicating the relevant year in which these (c) find out the NPV, IRR, and Profitability Index for the replacement proposal operating cashflow cashfiows tal (d) conduct a sensitivity analysis of NPV to the required rate af return falling within the range of 10% to 16% pa (with increments of 1%). Tabulate your results. This step is required because there are some uncertainties at the top management level regarding the appropriate required rate of return to be used due to substantial decrease in risk-free rate over the years 102 aan