This exercise parallels the machine-purchase decision for the Mendoze Company that is discussed in the body of the chapter. Assume that Mendoze is exploring whether to enter a complementary line of business. The existing business line generates annual cash revenues of approximately $5, 700, 000 and cash expenses of $3.810, 000, one-third of which are labor costs. The current level of investment decision regarding the complementary line. Mendoza estimates that incremental (noncash) net working capital $44, 000 will be needed to support the new business line. No additional facilities-level costs would be needed to support the new line-there is currently sufficient excess capacity. However the new line would required additional cash expenses (overhead costs) of $470, 000 per year. Raw materials costs associated with the new line are expected to be $1, 550, 000 per year, while the total labor cost is expected to double. The CFO of the company estimates that new machinery costing $4, 250, 000 would need to be purchased. This machinery has a seven -year useful life and an estimated salvage (terminal) value of $680, 000. For tax purposes, assume that the Mendoza Company would use the straight-line method. Assume, further, that the value weighted-average cost of capital (WACC) for Mendoza is 10% (after-tax) and that the combined to generate annual cash revenue of $4, 300, 000