b. (5 points) A farmer is considering replacing a labor-intensive machine system with a more capital-intensive one. Adopting the new system is estimated to increase machinery operating expenses by about $21,000 per year. The new machinery will cost $30,000 plus $5,000 for shipping and installation; however, the trade-in value of the old system is $10,000. Adopting the new machinery will result in annual depreciation of 33.33% in year 1, 44.45% in year 2, 14.81% in year 3, and 7.41% in year 4. The farmer forecasts that revenues will increase by $41,000 for each of the 4-year planning horizon, with zero salvage value and a 20% tax rate. Find the initial cash outflow and the incremental cash flows for each year. c. (3 points) Find the real value of a $10,000 payment due in 3 years if the expected inflation rate is 5% and the time preference rate is 3%. Find the real net present value. d. (2 points) A cattle rancher can afford an annual debt service payment of $10,000. What is the maximum size loan that this rancher can borrow if the annual interest rate for a 10-year loan is 5%?