Resurgence Brewery, one of the hottest microbreweries in the Buffalo area, is preparing for an East-Coast launch of their most popular product, Resurgence IPA. Since their current equipment cannot support this level of production, they are considering investing in a new integrated multi-tank brewing system, which includes all necessary equipment (e.g. mixing, brewing, fermenting tanks, and bottling equipment). You are helping the company owners analyze this project and determine if purchasing this integrated system would be a worthwhile investment. They have provided you with the following financial information to support your efforts. Resurgence's MARR is 9% Ordinary and capital gains are taxed at the marginal tax rate Resurgence's pays 21% in federal taxes and 6.8% in state taxes The vendor quote for the new integrated brewing system included the following: o System purchase cost: $4,751,920 o Freight and Handling: $11,286 o Installation, Calibration, Cleaning and Sanitization: $168,744 Annual operation costs are estimated to be $524,880 Annual maintenance costs are estimated to be $83,120 The new system is expected to be used for the next 6 years. After this time, they anticipate selling this system to another local microbrew for $1,000,000 and investing in an even larger system. Expected benefit of investing in the new system: Annual reduced labor costs: $1,755,000 o Annual reduced energy costs: $135,000 o Annual productivity gains: $675,000 The integrated system will be depreciated according to a 7-year MACRS schedule. This system employs some disposable tubing that will need to be replaced every two years. These hoses will cost $37,650 each time they are replaced An initial infusion of $600,000 in working capital is needed at the start of the project. This amount will be recovered in full at the end of the project. Resurgence will pay 45% of the initial investment (i.e. the cost basis of the equipment) in cash (i.e. their own money). The remaining 55% will be financed through a bank loan. . This loan will have an interest rate of 12% per year for the next 5 years. Annual loan payments will be made at the end of each year. Use the attached Excel template to build the financial statements and submit as an attachment to your answer. Remember to indicate your final decision, as well as your calculation of NPW, in your spreadsheet and HIGHLGHT these answers (NPW and your final decision) within the spreadsheet. Financial statement template.xlsx Resurgence Brewery, one of the hottest microbreweries in the Buffalo area, is preparing for an East-Coast launch of their most popular product, Resurgence IPA. Since their current equipment cannot support this level of production, they are considering investing in a new integrated multi-tank brewing system, which includes all necessary equipment (e.g. mixing, brewing, fermenting tanks, and bottling equipment). You are helping the company owners analyze this project and determine if purchasing this integrated system would be a worthwhile investment. They have provided you with the following financial information to support your efforts. Resurgence's MARR is 9% Ordinary and capital gains are taxed at the marginal tax rate Resurgence's pays 21% in federal taxes and 6.8% in state taxes The vendor quote for the new integrated brewing system included the following: o System purchase cost: $4,751,920 o Freight and Handling: $11,286 o Installation, Calibration, Cleaning and Sanitization: $168,744 Annual operation costs are estimated to be $524,880 Annual maintenance costs are estimated to be $83,120 The new system is expected to be used for the next 6 years. After this time, they anticipate selling this system to another local microbrew for $1,000,000 and investing in an even larger system. Expected benefit of investing in the new system: Annual reduced labor costs: $1,755,000 o Annual reduced energy costs: $135,000 o Annual productivity gains: $675,000 The integrated system will be depreciated according to a 7-year MACRS schedule. This system employs some disposable tubing that will need to be replaced every two years. These hoses will cost $37,650 each time they are replaced An initial infusion of $600,000 in working capital is needed at the start of the project. This amount will be recovered in full at the end of the project. Resurgence will pay 45% of the initial investment (i.e. the cost basis of the equipment) in cash (i.e. their own money). The remaining 55% will be financed through a bank loan. . This loan will have an interest rate of 12% per year for the next 5 years. Annual loan payments will be made at the end of each year. Use the attached Excel template to build the financial statements and submit as an attachment to your answer. Remember to indicate your final decision, as well as your calculation of NPW, in your spreadsheet and HIGHLGHT these answers (NPW and your final decision) within the spreadsheet. Financial statement template.xlsx