Cold Duck Manufacturing Inc. is a company that produces iBooks, among several other products. Suppose that Cold Duck Manufacturing Inc. considers replacing its old machine used to make iBooks with a more efficient one, which would cost $1,700 and require $380 annually in operating costs except depreciation. After-tax salvage value of the old machine is $700, while its annual operating costs except deprecation are $1,000. Assume that, regardless of the age of the equipment. Cold Duck Manufacturing Inc.'s sales revenues are fixed at $4,500 and deprecation on the old machine is $700. Assume also that the tax rate is 40% and the project's risk-adjusted cost of capital, r, is the same as weighted average cost of capital (WACC) and equals 10'%. Based on the data, net cash flows (NCFs) before replacement are, and they are constant over four years. Although Cpld Duck Manufacturing Inc.'s NCF's before replacement are the same over the 4-year period, its NCFs after replacement vary annually. The following table shows depreciation rates over four years. Complete the following table and calculate incremental cash flows in each year. Next evaluate the incremental flows by calculating the net present value(NPV), the internal rate of return (IRR), and the modified IRR(MIRR). Assume again that the cost of financing the new project is the same as the WACC and equals 10%. Based on the evaluation, replacing the old equipment appears to be a decision because