QUESTION $4(21$ marks$)$ Sharp Innovations $($Pty$)$ Ltd $("$Sharp Innovations"$)$ is evaluating the purchase of a new machine to produce a high$-$performance microchip, SmartChip. SmartChip has a short product life$-$cycle due to rapidly changing technology. The machine is expected to cost R$1500000$ million. Capital allowances may be claimed over a four$-$year period, and the machine is expected to have no scrap value at the end of year four. The total annual production and sales of SmartChip are forecast to be as follows: The selling price of SmartChip, in current price terms, will be R$320$ per unit, while the variable cost of SmartCbip, in current price terms, will be R$180$ per unit. Annual selling price inflation is expected to be $\backslash (4\mathrm{.}5\backslash \%\backslash ),$ and annual variable cost inflation is expected to be $\backslash (6\backslash \%\backslash ),$ effective from year $1.$ No increase in existing fixed costs is expected since Sharp Innovations has spare capacity in both space and labour terms. Sharp Innovations uses a nominal after$-$tax capital cost of $\backslash (10\backslash \%\backslash )$ for investment appraisal purposes. A tax rate of $\backslash (27\backslash \%\backslash )$ applies in the year in which the taxable profit occurs. REQUIRED: Advise the management of Sharp Innovations $($Pty$)$ Ltd if they should invest in the new machine. Support your answer with clearly referenced and detailed calculations. Round your answers to the nearest rand. Refer to Addendum A for the relevant discount factors.