1. Ramirez Co. is considering the purchase of a new machine ro replace the one currently in use. The old machine has a remaining life of 5 years with an $18,000 salvage. Annual depreciation on the old machine is $46,000. The new machine has a purchase price of $820,000, an estimated life of 5 years and an expected salvage value of $30,000. The initial investment required for the new machine is $640,000. Operating cost savings of $ 248,000 will be realized if the new machine is installed. The tax rate is 30%. The firm has an 8% cost of capital and uses straight line depreciation. Required: (1) Calculate the change in annual cash inflows associated with the purchase of the new machine. (2) Calculate the net present value associated with the purchase of the new machine