A company is considering replacing an old equipment with a new, more advanced machine. The new machine costs $100,000, will be used for 5 years, and with a salvage value of $10,000. The old machine has a current book value of $55,000, has 5 years of life remaining, an after-tax salvage value of $55,000 today and $5,000 (after-tax) after 5 years, and an annual depreciation of $10,000. The new machine is expected to increase annual sales by $30,000, and an annual increase in costs of $5,000 (excluding depreciation). Required rate of return is 10 percent, and tax rate is 40 percent. What is the project's operating cash flow in the 3rd year? 1 You are considering the following two mutually exclusive projects, Project A and Project B, and have estimated the cash flows associated with both projects as the following: Year CFA CFB 0 -90000 -70000 20000 30000 2 20000 30000 3 20000 28000 4 20000 5 20000 6 20000 7 15000 The discount rate is 10 percent. Tax rate is 34 percent. Evaluate the projects and provide your recommendation. SigogoGOMOGYO Begeive aggredits