1 Excel spreadsheet & 1750-2000 words excluding title andreferencesDetails: SAC is considering the purchase of new equipment tomanufacture specialty spark plugs. The new equipment would allowthe firm to manufacture 100000 additional spark plugs per year andis expected to have a useful life of 5 years and to have no salvagevalue at that time. SAC will depreciate the equipment using thestraight-line method. Specialty spark plugs are selling for anaverage price of $20 and are expected to cost $8 to manufacturewith the new equipment. Indirect costs are expected to remain thesame. The equipment will cost $3000000 to purchase and install.SACs tax rate is 34%.The company has Download the following capital structure andintends to keep its capital structure intact in financing thisequipment. Use appropriate analytical tools to determine if SACshould purchase the new equipment. Describe how you arrived at yourrecommendation and show your work.