Question A2 (15 marks) (a) Jackson is an engineer in an international company. His annual income is $3 million a year. Due to the outbreak of Coronavirus in Hong Kong and the lack of local production of medical mask, he considers to open a local company to produce this product. Besides the data of monthly operational expenses found in following chart, Jackson needs to spend $40,000 to examine his rented industrial building to ensure a clean factory environment which can meet the ISO 13485 standard before his production starts. In the meantime, he needs to order 2 set of machines which cost $200,000 each from Taiwan. The estimated resell value is $150,000 each after one year. Monthly operational expenses Raw materials 30,000 Salaries (Admin Staff) 90,000 Rent 100,000 20,000 40,000 60,000 80,000 100,000 120,000 Currently, Jackson owns $5 million in shares. To finance the setup capital of this medical mask company, Jackson needs to sell half of his shares which can yield the dividends of $250,000 a year. In order to run his new company, Jackson has to quit his current job. Since he targets both the local and overseas markets, Jackson estimates the total revenue is $8 million for the first year of operation. Calculate the annual Economic profit of Jackson's new company for the first year of operation. List the cost items and show your workings. Do you recommend Jackson to start his new business? Explain briefly. (10 marks) (b) Ideal Co. Ltd is a local company which produces medical mask. Due to the outbreak of Coronavirus in Hong Kong, the CEO considers buying a new set of machines to enlarge the production scale. TWO models of the same budget ($200,000) are available and the information is shown below: Model A Model B Resell value after ONE year $115,000 $135,000 Annual repair and maintenance fee $ 25,000 $ 20,000 Annual electricity consumption $30,000 $75,000 Which set of machines will you suggest the Company to purchase? Explain briefly with relevant data and working