The Rustic Welt Company is proposing to replace its old welt-making machinery with more modern equipment. The new equipment costs $9 million (the existing equipment has zero salvage value). The attraction of the new machinery is that it is expected to cut manufacturing costs from their current level of $8 a welt to $4. However, as the following table shows, there is some uncertainty both about future sales and about the performance of the new machinery:

	Pessimistic	Expected	Optimistic
Sales (millions of welts)	0.4	0.5	0.7
Manufacturing cost with new machinery (dollars per welt)	6	4	3
Economic life of new machinery (years)	7	10	13

Conduct a sensitivity analysis of the replacement decision, assuming a discount rate of 12% and enter the Equivalent Annual Cost Savings in the table below. Rustic Welt does not pay taxes.

Note: Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negative amounts should be indicated with a minus sign.

Please get the correct answers for all parts of the question where it is red with an X

Problem 10-4 Sensitivity analysis The Rustic Welt Company is proposing to replace its old welt-making machinery with more modern equipment. The new equipment costs $9 million (the existing equipment has zero salvage value). The attraction of the new machinery is that it is expected to cut manufacturing costs from their current level of $8 a welt to $4. However, as the following table shows, there is some uncertainty both about future sales and about the performance of the new machinery: Conduct a sensitivity analysis of the replacement decision, assuming a discount rate of 12% and enter the Equivalent Annual Cost Savings in the table below. Rustic Welt does not pay taxes. Note: Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negative amounts should be indicated with a minus sign