QUESTION $4($continued$)$Notes$1.$ The directors of Ice Cool $($Pty$)$ Limited have just entered into an agreement with supplier A for material and components at $75\%$ of the cost that Clear Air $($Pty$)$ Limited is currently paying. Raw materials purchased from supplier B will cost Ice Cool $($Pty$)$ Limited $10\%$ more than what Clear Air $($Pty$)$ Limited is currently paying$\mathrm{.}2.$ Ice Cool $($Pty$)$ Limited's employee salaries fall within a larger salary band than that of Clear Air $($Pty$)$ Limited's employee salaries. In order to facilitate a salary adjustment, the labour costs for manufacturing will increase by $15\%\mathrm{.}3.$ Depreciation is calculated at $20\%$ per annum on the manufacturing machine. All assets will be taken over by Ice Cool $($Pty$)$ Limited$\mathrm{.}4.$ Ice Cool $($Pty$)$ Limited has its own marketing division within the company, and projections by the head of marketing show that the total cost will be $80\%$ of what Clear Air $($Pty$)$ Limited is currently paying.Additional information Ice Cool $($Pty$)$ Limited has an old piece of manufacturing equipment that will be sold immediately after acquisition. It would be sold for R$20000.$ The total annual cash flow upon acquisition will occur for the indefinite future. We can therefore assume that the annual cash flow will occur to infinity. Ice Cool $($Pty$)$ Limited requires a fair rate of return of $20\%$ per annum on new investments. It is expected that all items of cost and revenue for the division would increase at $14\%$ per annum. Ignore the effects of taxation.REQUIREDDraft a report to the directors of Ice Cool $($Pty$)$ Limited and give your opinion on the following: $($a$)$Give you opinion on what the maximum purchase price should be for the acquisition of Clear Air $($Pty$)$ Limited. Support your opinion with relevant calculations and provide reasons for your answer.$(15)($b$)$Discuss non$-$financial factors that should also play a role in the negotiation of the final purchase price.