CASE 3 (10 marks): A firm is considering renewing its equipment to meet increased demand for its product. The cost of equipment modifications is RM1.9 million plus RM100,000 in installation costs. The firm will depreciate the equipment modifications using the straight-line method. Additional sales revenue from the renewal should amount to RM1,200,000 per year, and additional operating expenses and other costs (excluding depreciation and interest) will amount to 40% of the additional sales. The firm is subject to a tax rate of 40%. (Note: Answer the following questions for each of the next 6 years.) a. What incremental earnings before depreciation, interest, and taxes will result from the renewal? b. What incremental net operating profits after taxes will result from the renewal? (2 marks) (4 marks) c. What incremental operating cash flows will result from the renewal? (4 marks)