Problem 9-18 Beryl's Iced Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options: a. Purchase the machine it is currently renting for $150,000. This machine will require $20,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $250,000. This machine will require $15,000 per year in ongoing maintenance expenses and will lower bottling costs by $10,000 per year. Also, $35,000 will be spent upfront in training the new operators of the machine. Suppose the appropriate discount rate is 8% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the rental of the machine. Assume also that the machines will be depreciated via the straight-line method over seven years and that they have a 10-year life with a negligible salvage value. The marginal corporate tax rate is 21%. Should Beryl's Iced Tea continue to rent, purchase its current machine, or purchase the advanced machine? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section.A B C D E F G H K L M N 0 Discount rate 8% 10 Tax rate 21% 11 Useful life (years) Rent Machine Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Rent Year 6 Year 7 Year 8 -$50,000 Year 9 -$50,000 Year 10 $50,000 -$50,000 FCF (rent) -$50,000 -$50,000 -$50,000 -$50,000 $50,000 $50,000 NPV Purchase Current Machine Maintenance -$20,000 -$20,000 $20,000 -$20,000 -$20,000 Depreciation -$20,000 -$20,000 -$20,000 -$20,000 -$20,000 Capital Expenditures -$150,000 FCF (purchase current) 23 NPV 24 25 Purchase Advanced Machine 26 Maintenance $15,000 -$15,000 -$15,000 27 -$15,000 Other Costs -$15,000 -$15,000 -$15,000 -$35,00 -$15,000 $10,000 -$15,000 $10,000 -$15,000 $10,000 $10,000 28 Depreciation $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 29 Capital Expenditures -$250,000 30 FCF (purchase advanced) 31 NPV 32 33 Beryl's Iced Tea should 34Requirements 1 2 h 10 11 12 13 14 15 In cell E15, by using cell references, calculate the free cash flow for year 1 in case ofrenting the machine (1 pt.). To calculate the free cash flows for years 2 through 10 in case ofrenting the machine, copy cell E15 and paste it onto cells F15:N15 (1 pt.). In cell D16, by using cell references and the function NPV, calculate the net present value of renting the machine (1 pt.). In cell E20, by using cell references, calculate the depreciation of the current machine for year 1 (1 pt}. To calculate the depreciation of the current machine for years 2 through 7, copy cell E20 and paste it onto cells F20:K20 (1 pt.). In cell D22, by using a cell reference, calculate the free cash flow for year 0 in case ofpurchasing the current machine (1 pt). In cell E22, by using cell references, calculate the free cash ow for year 1 in case ofpurchasing the current machine (1 pt). To calculate the free cash flows for years 2 through 10 in case ofpurchasing the current machine, copy cell E22 and paste it onto cells F22:N22 (1 pt.). In cell D23, by using cell references and the function NPV, calculate the net present value of purchasing the current machine (1 pt.). In cell E28, by using cell references, calculate the depreciation of the advanced machine for year 1 (1 pt.). To calculate the depreciation of the advanced machine for years 2 through 7, copy cell E28 and paste it onto cells F28:K28 (1 {it}. In cell D30, by using cell references, calculate the free cash flow for year 0 in case ofpurchasing the advanced machine (1 pt.). To calculate the free cash ows for years 2 through 10 in case ofpurchasing the advanced machine, copy cell D30 and paste it onto cells E30:N30 (1 pt.). In cell D31, by using cell references and the function NPV, calculate the net present value of purchasing the advanced machine (1 pt). In cell D33, type whether Beryl's Iced Tea should continue to rent, purchase the current machine, or purchase the advanced machine. (1 pt.)