Problem 3 (18 marks) MacDonald Contractors is considering upgrading a large portion of their manufacturing equipment. The new equipment will cost $4,500,000 and an additional $50,000 of installation costs will be required. The equipment will be at end of life in five years at which time they expect they will be able to resell it for $1,500,000. As a result of this new more efficient equipment they expect sales to increase from 200,000 units to 235,000 units per year until the equipment is retired. Currently they can sell the product for $25 per unit and they expect that price to remain the same. As well with the increased production level, they will require increased inventory at a cost of $60,000