The F Inc.'s materials manager is considering the installation of a just-in-time (HT) inventory system for L-20, one of the chemicals used in the production process. Currently, the chemical is purchased for $30 each pound. The rm uses 4,300 pounds L-20 per year. The controller estimates that it costs $150 to place and receive a typical order of L-20. The annual cost of storing L-20 is $1 per pound. F Inc's manufacturing engineering team identies the following eifec1s of adopng a JIT inventory system: 1} F inc. will order 100 pounds L-20 each time. 2) The cost of placing an order for L-20 will be reduced to $20. 3} Suppliers would add $4 to the price per pound for frequent deliveries. 4} Currently there is a defect-assessment cost of $120,000 per year. This cost is expected a reduction of20% under the JIT system. F Inc. requires a 10% annual rate of return on investment Required: a) From a nancial perspective, determine whether it is in the best interest of F Inc. to install the JIT system. Show your calculations. (12 marks}