6. Replacement analysis Green Moose Industries is a company that produces Books, among several other product that Green Moose Industries considers replacing its old machine used to make bools with a more efficient, which would cost $1,000 $250 operating costs depreciation. After the value of the machines, while its operating costs recept depreciation we $1,100. Assume that gadies of the age of the comment, Green Moore Industries sales revenue wed 51.500 and deprecation on the machine is $600 Assumes that the tax rate 40% and the project's risk adjusted cost of capital is the same as weighted age cost of capital (WACC) and equals to Based on the data, bet cash flows (NC) before replacement are and they are constant over four years Although Green Moose Industries's Nors before replacement are the same over the year period, is NC or replacement varyan The Following table shows depreciation rates over four years, Year Year 1 33.33 Year 2 14.454 Deprecation rates Year 4 7.41 Complete the following table and calculate incremental cash flows in each year. Mint Round your answers to the nearest dollar and remember to entera minus sign of the calculated value is negative Year 1 Year 2 Year Year 4 Year o $1,500 5600 $3,500 $250 $3,500 $250 New machine cost After-tax salvage value,old machine Sales revenus Operating costs except depreciation Operating income Alte tax operating income Net cash flows after replacement (adding back depreciation) Incremental Casa Flows $3,500 5250 12.450 $1.470 5 $3.500 $250 $2,983 $1,790 $1,790 $372 5 $ $9,112 $1,870 2.003 $2,270 $590 5 Next evaluate the incremental cash flows by calculating the net present value (NPV), the internal rate of return (IRR), and the modified IRR (MIRR) Assume again that the cost of financing the new project is the same as the WACC and cu 10%. Hint: Use spreadsheet program's functions or use a financal calculator for this task NPV IRR MIRR Evaluation Based on the evaluation, replacing the old equipment appears to be a decision becau