Altimes ums will need to decide if they want to continue to the current equipment or replace the equipment with mir egun. The company will need to do replacemene vialysis to determine which option is the best lancial decision for the company Price Co. is considering replacing an esetting piece of equipment. The project involves the following: . The new equipment will have a cost of $1,200,000, and it is eligible for 100% bonus depreciation so it will be fully deprecated at The old machine was purchased before the new tax law, so it is being depreciated on a straight-line basis. It has a book value of $200.000 (at year and for more years of depreciation of ($50,000 per year). . The new equipment will have a salvage value of at the end of the project's life (year 6). The old machine has a current salvage value (at yuar) of $300,000. Replacing the old machine will require an investment in the operating warking capital (NOWC) a 45.000 that will be recovered at the end of the project's befyear ). . The new machine is more efficient, so the firm's incremental earrings before interest and lasts (EBIT) will increase by a total of $500,000 in each of the next six years [years 1-6). Hist: This value represents the difference between the rivals and operating tools (including direction expense generated in the new equipment and that came in the old quipment. . The project's cost of capital is 13% . The company's annual tax rate is 25% Complete the following table and compute the incremental cash flows associated with the replacement of the old equipment with the new equipment Year o Year 1 Year 2 Year Year 4 Years investment EBIT Depreciation + Salvage - Tax Salvage - NOW + Recapture of NOW Total free cash flow The net print value (NPV) of this replacement project O $610,136 O $35,542 O $92,218 O 1,515