The Managerial Accounting Department at your company has beenengaged by the Production Department for assistance in evaluating apurchase decision. The equipment the production department iscurrently utilizing is outdated and has become costly to maintain.New machines would also provide increased efficiencies leading toincreased sales. Due to this, the department is consideringreplacing all equipment with new machines. Given the financialinformation listed below, provide the following: - An excelworksheet showing the annual cash flows by line-item and in totalfor the keep vs. purchase decision, for 8 years. - Calculate theNPV in excel - Calculate the IRR in excel - Should the Departmentpurchase new equipment or maintain the current equipment? - Preparea report** to management summarizing the following : o Overview ofthe issue being considered (who has engaged you, why?) o Overviewof the main cost/decision drivers (what is most important to thisdecision) o NPV/IRR Provide and describe these numbers (includingwhat they mean) and based on those include and support yourrecommendation to the Production Department. Data: - Cost ofCurrent Machines: $700,000 - Cost of New Machines: $1,000,000 -Annual Maintenance on Current Machines: $75,000 - AnnualMaintenance on New Machines: $12,000 - Salvage Value of CurrentMachines: $250,000 - Immediate employee training cost on newmachines: $5,000 - Increased sales opportunity provided by newmachines: $200,000 first year and growing at 5% per year after -Companys Required Rate of Return: 12% - Contribution margin: 45% -Depreciation and income taxes should be ignored.