Reno is considering purchasing computerized cutting and shaping equipment to replace its existing manual equipment. The existing equipment has a net book value of $$190,000,$ a remaining useful life of $5$ vears, and a zero$-$shage ralue at that time. If the equipment is sold today, management believes they would receive $$190,000.$

The new equipment is expected to improve quality, is more efficient and will reduce annual operating costs by $$200,000$ for the first two years, and $$150,000$ for the next three years. The acquisition cost of the equipment is $$625,000.$ The equipment uses the straight$-$line method of deprecation over its expected useful life of $5$ vears. The equipment is expected to have a zero$-$salvage value after $5$ years.

Management has determined that the required rate of return for projects of this isk is $8\%($minimum accounhing retum is also $8\%)$ and that the maximum payback period is $3$ years. Assume a tax rate of $40\%.$

a$.$ Analyze the project using each of the following quantitative approaches: net present value, payback period, cocrud accounting rate of return, and discounted payback period.

b$.$ Based solely on quantitative factors, should Reno undertake this project? Why or why not?

c$.$ What qualitative factors should Reno consider in making this decision?