Albertosi Company is considering replacing an old machine, which is totally depreciated using the straight-line method with zero book value; however, it can be sold as a secondhand machine to another company for $6,000. The new machine can be purchased for $80,000, including installation. The machine reduces the labor cost of the company by $16,500 per year and reduces damages by $400 per month. However, electricity costs will go up by $100 per month and maintenance costs by $900 per month. The machine has no effect on sales. The operation new machine requires an increase of $4,000 in NWC (will be recovered at the end of the project). The machine falls into a 5-year MACRS class. The life of the project is expected to be six years, at which time the company sells the machine for $5,000. The Company tax rate is 40 percent, and its WACC for this project is 11.83 percent.

What are MIRR and NPV of this project? You must show your solutions step by step. You need to explain the approach that you use to solve this problem in writing as well, use Word for the explanation. No credit will be given without explanation.

IF SOLVED IN EXCEL, PLEASE POST EXCEL FORMULA SHEET AS WELL