5. Royal Mount Games would like to invest in a division to develop software for video games. To evaluate this decision, the firm first attempts to project the working capital needs for this operation. Its chief financial officer has developed the following estimates (in malions of dollars): (To copy the table below and use in Excel, click on icon in the upper right comer of table.) Assuming that Royal Mount currently does not have any working capital invested in this division, calculate the cash flows associated with changes in working capital for the first five years of this investment. (Enter increases as negative numbers since they are uses of cash.) The cash flow associated with the change in working capital for year 1 is 5 miltion. (Round to the nearest integer.) The cash flow associated with the change in working capital for year 2 is $ million. (Round to the nearest integer.) The cash flow associated with the change in working capital for year 3 is $ million. (Round to the nearest integer.) The cash flow associated with the change in working capital for year 4 is $ million. (Round to the nearest integer.) The cash flow associated with the change in working capital for year 5 is $ million. (Round to the nearest integer.) 7. One year ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is avallable that offers many advantages and that you can purchase it for $160,000 today. The CCA rate applicable to both machines is 30%; neither machine will have any long-term salvage value. You expect that the new machine will produce earnings before interest, taxes, depreciation, and amortization (EBITDA) of $60,000 per year for the next 10 years. The current machine is expected to produce EBITDA of $24,000 per year. All other expenses of the two machines are identical. The market value today of the current machine is $50,000. Your company's tax rate is 42%, and the opportunity cost of capital for this type of equipment is 10%. Should your company replace its year-oid machine? What is the NPV of replacement? The NPV of replacement is 3 (Round to the nearest doliar.) Should your company replace its year-old machine? A. No, because there is a loss from replacing the machine, B. No, because the only time a machine should be replaced is when it stops working completely. C. Yes, because there is a profit from replacing the machine, D. Yes, because a new machine will always be an improvement for the company