Big Tech Corporation is considering replacing one of its machines with a more efficient one. The old machine has a book value of $60,000 and a remaining useful life of 5 years. It can sell the old machine now for $ 265,000. The old machine is being depreciated by 120,000 per year straight line. The new machine has a purchase price of $ 1,175,000, an estimated useful life, five years of MACRS class life, and a salvage value of $145,000. Annual economic savings is $255,000 if the new machine is installed. Taxes are 21%, and WACC is 12.

Depreciation Table:

5 Years

1 : .20

2: .32

3: .1920

4: .1152

5: .1152

Calculate the NPV and IRR of the project and decide whether to accept or reject the project and why? (SHOW ALL WORK in EXCEL and include EXCEL FORUMLAS).