Connect Inc. is evaluating new machinery in its foundry. The new machinery would replace existing equipment. The new machinery would cost $$230,000,$ would last five years, and would have a salvage value of $$28,000.$ The existing machinery currently has a net book value of $$52,000$ and could be sold for $$38,000.$ If kept, the old machine would have a salvage value of $$6,000$ in five years. The new machinery is expected to lower direct labour costs by $$18,000$ per year. The current variable overhead rate is $120\%$ of direct labour. Other annual cost savings are projected to be $$30,000.$ Due to the reduction in the production cycle time, working capital requirements will decrease by $$25,000$ during the life of the new machine. Ignore income taxes.

a$.$ Compute the net present value of replacing the existing equipment at a $9\%$ required rate of return.

b$.$ Compute the internal rate of return.