Calligraphy Pens is deciding when to replace its old machine. The machine's current

salvage value is $$2,800,000.$ Its current book value is $$1,675,000.$ If not sold, the old

machine will require maintenance costs of $$685,000$ at the end of the year for the next

five years. Depreciation on the old machine is $$335,000$ per year. At the end of five

years, it will have a salvage value of $$130,000$ and a book value of $$0.$ A replacement

machine costs $$4,400,000$ now and requires maintenance costs of $$355,000$ at the end

of each year during its economic life of five years. At the end of the five years, the new

machine will have a salvage value of $$720,000.$ It will be fully depreciated by the

straight$-$line method. In five years, a replacement machine will cost $$3,400,000.$ The

company will need to purchase this machine regardless of what choice it makes today.

PLEASE INCLUDE FULL EXCEL AND FORMULAS

The corporate tax rate is $25$ percent and the appropriate discount rate is $9$ percent. The

company is assumed to earn sufficient revenues to generate tax shields from

depreciation.

Calculate the NPV for the new and old machines. $($Do not round intermediate

calculations and enter your answers in dollars, not millions, rounded to $2$ decimal

places, e$.$g$.,1,234,567\mathrm{.}89.)$