Case Assignment Magic Timber and Steel (Magic) has two options: Keep the old machine, the Matrix 750, by spending money upfront to service and improve its output. . Buy the new and improved machine, the Delta A390. The proposed investment question asks, "Should Magic buy the new machine?" Thus, only one NPV calculation is required, which will include the net of the cash flows of the two options. If the NPV is a positive number, Magic should purchase the new Delta. If the NPV is a negative number, Magic should keep the Matrix. Your team performed NPV calculation and the following table is the result. NPV of Purchasing Delta Calculation of Tax 2 3 5 Repair costs saved (old) 28,000 Maintenance saved (old) 7,000 7,000 7,000 7,000 7,000 Major service saved (old) 4,000 Labour saving (new) 5,250 5,500 5,750 6,000 6,250 Electricity saving (new) 4,725 4.800 4,875 4,950 5,025 Maintenance (new) 2,000 -3,000 4,000 -5,000 -6,000 Depreciation foregone (old) 6,00 6,00 6,00 6,000 6,000 Depreciation (new) 14,000 -14,000 -14,000 -14,000 -14,000 Profit/loss on sale (new) -10,000 Taxable income 28,000 6,975 6,300 9,625 4,950 -5,725 Tax payable (saving) 8,400 2,093 1,890 2,888 1,485 -1,718 Cash Flows Sale of MATRIX 35,000 Cost of DELTA 140,000 Scrap foregone (old) -5,000 Repair costs saved (old) 28,000 Maintenance saved (old) 7,000 7,000 7,000 7,000 7,000 Major service saved (old) 4,000 Selling price (new) 60,000 Labour saving (new) 5,250 5,500 5,750 5,000 6,250 Electricity saving (new) 4,725 4,800 4,875 4,950 5,025 Maintenance (new) -2,000 -3,000 -4,000 -5,000 -6,000 LESS TAX -8,400 2,093 1,890 -2,888 -1,485 1,718 CASH FLOWS 85,400 12,883 12,410 14,738 11,465 68,993 Discount factors at cost of capital 0.9009 0.8116 0.7311 0.6587 0.5934 Discounted cash flows (DCF) $85,400 $11,606 $10,072 $10,776 $7,552 $40,944 Net Present Value (sum of DCF) -$4,450Your team also performed the following sensitivity analysis 0 Change the discount rate to 12 per cent. - Change the Year 5 selling price of the Delta to $80,000. 0 Change the maintenance costs for the Delta: Year 1 costs are $1,000. increasing by $1,000 each year. 0 Change all of the above factors together. The results are as follows, 0 Change the discount rate to [2 per cent: NPV : -$7,080 0 Change the Year 5 selling price ofthe Delta to $80,000: NPV : $3,858 0 Change the maintenance costs for the Delta: Year 1 costs are $1,000, increasing by $1,000 each year: NPV = -$l,863 - Change all the above factors together: NPV = $3.387 Before you make a nal report to Mr. Davidson, you try to think of other factors that have not been considered in the NPV analysis that might have an impact on the decision (quantitative and/or qualitative). You identifythese factors as bullet points in your final report, along with a few sentences to explain their relevance