The Wessal Karim Corporation is considering installing a new conveyor for materials handling in a ware house. The conveyor will have an initial cost of Rs$.85,000$ and an installation cost of Rs$.6,000.$ Expected benefits of the conveyor are: $($a$)$ Annual labor cost will be reduced by Rs$.17,000,$ and $($b$)$ breakage and other damages from handling will be reduced by Rs$.600$ per month. Some of the firm$$s costs are expected to increase as follows: $($a$)$ Electricity cost will rise by Rs$\mathrm{.}200$ per month, and $($b$)$ annual repair and maintenance of the conveyor will amount to Rs$\mathrm{.}999.$ Assume the firm uses the MACRS rules for depreciation in the $5-$year property class. No salvage value will be recognized for tax purposes. The conveyor has an expected useful life of $8$ years and a projected salvage value of Rs$.4,500.$ The tax rate is $35$ percent.

$($a$)$ Estimate future cash inflows for the proposed project.

$($b$)$ Determine the projects NPV at $10$ percent. Should the firm buy the conveyor?