use the LAST IMPRESSION CASE from GITMAN BOOK $($ P $503-504)$ Case study questions:

$1.$ For each of the proposed replacement presses, determine:

$-$Initial Investment

$-$Operating cash inflows $($consider depreciation in year $6)$

$-$Terminal cash flow $($This is at the end of year $5)$

$2.$ Using data developed in question $1,$ determine the relevant cash flow stream associated with each of the two proposed replacement presses $($assume each set of cash flows terminates at the end of $5$ years$)$

$3.$ Using the data from question $2,$ apply each of the following decision techniques:

$$ Payback period $($Note: for year $5,$ use only operating cash inflows $$ that is$,$ exclude terminal cash flow $$ when making this calculation$)$

$$ Net Present Value $($NPV$)$

$$ Internal rate of return $($IRR$)$

$4.$ Draw Net Present Value profiles for the two replacement presses on the same set of axes, and discuss conflicting rankings of the two presses, if any, resulting from use of NPV and IRR decision techniques.

$5.$ Recommend which, if either, of the presses the firm should acquire if the firm has $(1)$ unlimited funds or $(2)$ capital rationing

$6.$ What is the impact on your recommendation of the fact that the operating cash inflows associated with press A are characterized as very risky in contrast to the low$-$risk operating cash inflows of press B$?$