The owner of a local coffee chain, Morning Caf, is thinking about replacing some of the older coffee machines. The existing machines are old and require maintenance. The finance department has gone through the outgoing payments and reported that the machines cost 110,000; buying new ones for all the branches in the country will cost 125,000. Based on experience, we know that the new machines will last for five years, and the company will be able to sell them for 25,000. The depreciation rate for the existing machines is 20,000 per year, and the finance manager will write them off in three years. The owner knows that if they do not replace the machines with new ones now, the machines will need to be replaced in two years. There is a buyer for the old machines now who is offering 35,000 per machine. If the owner doesn't sell them right now and instead keeps them for another two years, they would be able to sell the machines for 12,000 each. Considering the maintenance cost of the existing machines, the owner will be able to save 25,000 per year (cost of operation) by buying new ones. a) Use your knowledge to explain the best decision. Is it better to substitute the old machines with the new ones? b) What would the cash flow be, assuming we are not concerned with what's going to happen in two years and we are just wondering whether we should replace the machines or not