I have no idea how to solve the Problem 7. Would you please help to provide the detail calculation with explanation?

CR7: 4. 7 APR = 5% Views of Proponents The balance of the loc mont Laws and regulations have limitations Ethics is not necessarily again - - The market is not ~ - Information = 93.500 X 1. 00417 12 = 98 5 yrs = 60 months. Stak- FV ( 0. 00417. 60, - 1300 . 9828 Chapter 7 Discounted Cash Flow Techniques 281 6. You are selling a product on commission, at the rate of $1,000 per sale. ger To date, you have spent $800 promoting a particular prospective sale. You me are confident you can complete this sale with an added expenditure of some ent. undetermined amount. What is the maximum amount, over and above what you have already spent, that you should be willing to spend to assure the sale? 7. One year ago, Caffe Vita Coffee Roasting Co. purchased three small-batch 00 coffee roasters for $3.3 million. Now in 2018, the company finds that new roasters that offer significant advantages are available. The new roasters er- can be purchased for $4.5 million, and have no salvage value. Both the new and the old roasters are expected to last until 2028. Management antici- in pates that the new roasters will produce a gross margin of $1.2 million a ild year, so that, using straight-line depreciation, the annual taxable income ht will be $750,000. er The current roasters are expected to produce a gross profit of $600,000 a year and, assuming a total economic life of 11 years and straight-line depre- ix ciation, a profit before tax of $300,000. The current market value of the old roasters is $1.5 million. The company's tax rate is 45 percent, and its d minimum acceptable rate of return is 10 percent. Ignoring possible taxes on sale of used equipment and assuming zero salvage values at the end of the roasters' economic lives, should Caffe Vita replace its year-old roasters? in