Consider the case of LoRusso Company: The managers of LoRusso Company are considering replacing an existing plece of equipment, and have collected the following information: - The new piece of equipment will have a cost of $2,400,000, and it will be depreciated on a straight-ine basis over a period of flive years. - The old machine is also being depreciated on a straight-line basis. It has a book value of $200,000 (at year 0 ) and three more years of depreciation left ( $50,000 per year). - The new equipment will have a salvage value of so at the end of the project's life (year 5 ). The old machine has a current salvage value (at year 0 ) of 5300,000 . - Replacing the old machine will require an investment in net working capital (NWC) of $30,000 that will be recovered at the end of the project's life (year 5). - The new machine is more efficient, so the incremental increase in operating income before taxes wili increase by a total of s400,000 in each of the next five years (years 1-5). (Hint: This value represents the difference between the revenues and operating costs (including depreciation expense) generated using the new equipment and that earned using the old equipment.). - The project's required rate of return is 9%. - The company's annual tax rate is 30%. Complete the following table and compute the incremental cash flows associated with the replacement of the old equipment with the new equipment. Consider the case of LoRusso Company: The managers of LoRusso Company are considering replacing an existing plece of equipment, and have collected the following information: - The new piece of equipment will have a cost of $2,400,000, and it will be depreciated on a straight-ine basis over a period of flive years. - The old machine is also being depreciated on a straight-line basis. It has a book value of $200,000 (at year 0 ) and three more years of depreciation left ( $50,000 per year). - The new equipment will have a salvage value of so at the end of the project's life (year 5 ). The old machine has a current salvage value (at year 0 ) of 5300,000 . - Replacing the old machine will require an investment in net working capital (NWC) of $30,000 that will be recovered at the end of the project's life (year 5). - The new machine is more efficient, so the incremental increase in operating income before taxes wili increase by a total of s400,000 in each of the next five years (years 1-5). (Hint: This value represents the difference between the revenues and operating costs (including depreciation expense) generated using the new equipment and that earned using the old equipment.). - The project's required rate of return is 9%. - The company's annual tax rate is 30%. Complete the following table and compute the incremental cash flows associated with the replacement of the old equipment with the new equipment