Tou are an Acquisition Offer for an Investment Bank. Your Discount Rate is 5.8%. Gross Income: The Company: Year 1: $610,261 Year 2: 5644,746 Year 3: $676,561 Year 4: $694,712 Year 5: $713,206 Year 6: $716,050 You have estimated the cost of operations at the company to be 40%. Additionally, vou believe that the ever chanting procensinu world requires constant upgrades to equipment. Therefore, you are projecting a new file server and workstations will need to be purchased in year two. The cort of the new system is $75,000. You believe a fair Growth Rate is 2%. Your WACC is 5,3%. The asking price is $5,100,000, Your firm requires all investment models to be based upon 5 years. Questions: 1. What is the Residual Rate? Hint: What is the formula for Residual Rate? 2. What is the Capitalization Rate? Hint: What is the formula for Capitalization Rate? 3. What is the IRR of the acquisition? 4. What is the NPV of the acquisition? 5. Do you recommend this acquisition? Explain