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Signs For Fields Machinery Ltd. is considering the replacementof some technologically obsolete machinery with the purchase of anew machine for $72,000. Although the older machine has no marketvalue, it could be expected to perform the required operation foranother 10 years. The older machine has an unamortized capital costof $27,000. The new machine with the latest in technologicaladvances will perform essentially the same operations as the oldermachine but will effect cost savings of $17,500 per year in labourand materials. The new machine is also estimated to last 10 years,at which time it could be salvaged for $11,500. To install the newmachine will cost $7,000. Signs For Fields has a tax rate of 30percent, and its cost of capital is 15 percent. For accountingpurposes, it uses straight-line amortization, and for tax purposesits CCA is 20 percent.a. Should Signs for Fields Machinery purchase the newmachine?b. If the old machine has a current salvage value of $9,000,Should Signs For Fields purchase the new machine?c. Calculate the IRR and PI for part a.