Use the following information for Question 16 - 22: CanCan reported the following selected data for the year ended December 31, 2022: Average operating assets $4,500,000 Operating Income After Tax 350,000 Tax rate 30% Included in the operating assets is a bottling machine which was acquired 4 years ago at a cost of $780,000. Although, this machine is still in good condition, management is considering replacing the existing bottling machine with an energy efcient machine. The current market value of the existing machine is $200,000 and the residual value is $20,000 if disposed at the end of 6 years. The following is the annual expenses associated with the existing bottling machine: Annual expenses: Existing bottling machine Direct materials $180,000 Direct labour 240,000 Quality Control 80,000 Factory Maintenance 60,000 Depreciation 76,000 On January 10, 2023, a manufacturer is offering to sell a new bottling machine to CanCan at a price of $940,000. The machine would last for 6 years and has an expected residual value of $40,000. The new machine will reduce $20,000 of inventory at the beginning; however, this amount will be tied up at the end of the 6th year. With the new machine, CanCan expects to reduce the prime costs by 20% and the manufacturing overhead costs, excluding depreciation, by 40%. CanCan has a minimum desired rate of return of 4% and a cutoff period of 4 years in evaluating the new project. Managers who are being evaluated using Residual income (RI) are unsure whether this is a good idea. CanCan nanced the old bottling machine by borrowing 50% from a local bank, with 4% interest rate, raising 20% from new shareholders, with 8% required rate of return, and the rest from retained earnings, with 5% required rate of return. Please enter your answers without "$" and " , Please enter your answers without " ", and " , ". Using the nancial information from 2022, (Rounded to 1 decimal point.) Calculate the effective cost of debt: % Calculate the effective cost of new shares: % Calculate the effective cost of retained earnings: % Calculate the WACC: % Please enter your answers without "$", and ", " Using the financial information from 2022, to Calculate the Cost of Capital, using the WACC: $ Calculate the Economic Value-Add (EVA): $ Calculate the residual income (RI):Identify the cost hierarchy level for each activity: J [Select] Unit Level Batch Level Product Level OrganizationIFacility-sustaining Level Quality Control Factory Maintenance Depreciation Please enter an absolute number for positive, and a bracket number, e.g. (20000) for negative. Enter your answers without " ", and " , ". $ Calculate the net initial investment: $ Calculate the total annual cost saving: $ Calculate the present value of the total annual cost savings (Rounded to the nearest dollar.) : $ Calculate the total terminal value: $ Calculate the present value of the total terminal value (Rounded to the nearest dollar.) : $ Net Present Value (Rounded to the nearest dollar.) : Calculate the point of indifference in terms of annual cash ow: (Rounded to the nearest dollar.) Determine the payback period: (Rounded to 4 decimal points.) Determine the IRR: (Rounded to 1 decimal points. ) Please round each calculation to the nearest dollar. Please enter an absolute number for positive, and a bracket number, e.g. (20000) for negative. Enter your answers without " ", and " , Calculate the incremental accounting income (or loss) for the rst year if the new bottling machine is purchased and the old bottling machine is sold. Calculate the incremental cost savings: $ Calculate the incremental depreciation expense: $ Calculate the gain/loss of the sale of existing machine: $ Calculate the incremental accounting income: $ Based on your calculations above, state your conclusion on whether the new bottling machine should be purchased: Net Present Value [ Select ] Yes Indifferent Payback Period No Accounting Income for the first year [ Select ] V Overall [ Select ]