0805412 0AAA60040ISETFAAS7BSOCE80000 eandey 00 010000003a2ld i-6) Twnew eq.prent wil have . cost of SLA00,e00, and bd be depreciated on . stragitine basis ove a-iod o, six years Cyears (s50,0o0 per yearj $300,020 Replacing the od a proins's e 6). The oid mechine has a current salvage vaue (at year 0) of in rut working capkal (NwC) of20,000 that wil, be recovered at the end of the project's Ire (year The now machine is more efficiens, so the fumrls incremental mings befcre interest and taxes te berween the revensis and oparating costs (including depreciation expense) next six years (rears 1-6). Hiet:This value represents the ofference generated using the new eculament The project's cost of apcai is 1 %. The company's annual tax rate is 35% and that eamed using the did equiprent . * Complete the fo lowing table and compube the incremeetal cash fows assoclsted with the replacament of the oid equioment wit h the new ecuipment. Year 3 Year 5 Year 6 Year o Year 1 Initial investmert $400,000o od depreciasion + Saleage value Tax on saivage -NVC + Recapture of NWC Total free cash Eow $560,000 The net present value (Npv) of ths eplacement project is: O $462,834 O $544,511 O $626,188 O $653413 0805412 0AAA60040ISETFAAS7BSOCE80000 eandey 00 010000003a2ld i-6) Twnew eq.prent wil have . cost of SLA00,e00, and bd be depreciated on . stragitine basis ove a-iod o, six years Cyears (s50,0o0 per yearj $300,020 Replacing the od a proins's e 6). The oid mechine has a current salvage vaue (at year 0) of in rut working capkal (NwC) of20,000 that wil, be recovered at the end of the project's Ire (year The now machine is more efficiens, so the fumrls incremental mings befcre interest and taxes te berween the revensis and oparating costs (including depreciation expense) next six years (rears 1-6). Hiet:This value represents the ofference generated using the new eculament The project's cost of apcai is 1 %. The company's annual tax rate is 35% and that eamed using the did equiprent . * Complete the fo lowing table and compube the incremeetal cash fows assoclsted with the replacament of the oid equioment wit h the new ecuipment. Year 3 Year 5 Year 6 Year o Year 1 Initial investmert $400,000o od depreciasion + Saleage value Tax on saivage -NVC + Recapture of NWC Total free cash Eow $560,000 The net present value (Npv) of ths eplacement project is: O $462,834 O $544,511 O $626,188 O $653413