Short answer B03 final: Question 2 Winox Inc. is considering replacing its machine acquired 4 years ago at a cost of $135000. This machine is still in good condition but management wants more flexibility and lower manufacturing costs. The actual current market value of the machine is $82000, with a salvage value of $15000 in 6 years. A manufacturer is offering a new machine at a price of $168000. The machine would last 6 years and has an expected salvage value of $24000. The new machine will release $9000 in working capital, which will be required at the end of the 6th year. With the new machine, management estimates important changes in the manufacturing costs in every quarter: uarterly Expenses Direct labour Direct material Repairs & Maintenance 4250 Receiving &handlin Testing & inspection Amortization Total Expenses Quarterly production (in 500000 units Old Machine New Machine 46800 23260 42280 20450 6470 2150 5560 6000 3420 4280 3000 500000 Winox has a minimum desired nominal annual rate of 16% with quarterly compounding, and a cutoff period of 3 years in evaluating the new project. Required 1. Calculate the new present value. 2. Calculate the point of indifference in terms of quarterly cost savings. 3. Determine the payback period in years 4. Calculate the quarterly accrual accounting rate of return 5. Determine the quarterly Intemal Rate of Return (IRR) to 2 decimal points. 6. Based on your calculations above, state your conclusion on whether the new machine should be purchased. Please briefly comment; in point form, on (1) quantitative measures based on each of the four financial measures, and (2) two qualitative issues