3. Degnan Dance Company, Inc, a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. The firm pays 4096 taxes on ordinary income and capital gains. The following information is given. a. What is the book value of the existing asset being replaced? (0.75 Mark) b. What is the tax liability from the sale of the existing asset? ( 0.75 Mark) c. What is the initial investment required for the new asset (you should take the proceeds from the old asset into consideration)? ( 0.75Mark) d. What are the incremental earnings before depreciation and taxes in years 1 and 2?(0.75 Mark) e. What are the incremental depreciations in years 1 and 2? (Refer to MACRS table in the formula sheet). ( 0.75Mark) f. What are the incremental after-tax cash flows (relevant cash flows) in years 1 and 2? (0.75 Mark)