QUESTION 2 [59 Marks] Jack Devaro, the CEO of Angela Designer Bags, has requested that you assist with completing the Replacement Analysis that the Finance Manager, who abruptly resigned a week ago, was busy completing. Devaro has provided you with a snapshot of what he could salvage from the previous Finance Manager's computer and has requested that you calculate the rest of the amounts indicated in the snapshot below.

A B C D Angela Designer bags company Replacement Analysis Old Machine New machine Difference 4 Price 50000 87000 5 shipping and install 0 8000 6 Original life 12 10 7 current life 6 6 8 Original savage value 0 20000 9 Current salvage value 25000 0 10 Book value 22000 90000 11 Increase in raw materials 0 5000 12 Depreciation 5000 11500 13 Salaries 35000 14 Maintenance 8000 7000 15 Defects 4000 2000 16 Marginal tax rate 27% 17 Required return 12% 18 19 Cashflows 20 Initial outlay 21 Annual after- tax savings 22 Depreciation tax benefit 23 After tax cashflows 24 Terminal cashflow