Correct answers are shown in red at the end of each question. Show how you arrive at the correct answers. For the parts that require the use of a financial calculator, write/type out what keys you use and the values you enter for each key. Problem(s) should be done in a manner that your work can be followed easily. Scores will be based on completeness and correctness. The Ellis Equipment Company purchased a machine 5 years ago at a cost of $100,000. The machine had an expected life of 10 years at the time of purchase, and an expected salvage value of $0 at the end of the 10 years. It is being depreciated by the straight-line method. The old machine can be sold today for $65,000. The Company is considering a replacement of the old machine. A new machine can be purchased for $150,000, including installation costs. During its 5-year life, sales are expected to increase by $70,000 per year, and operating expenses are expected to increase by $20,000 per year. At the end of its useful life, the machine is expected to have a salvage value of $5,000. MACRS depreciation will be used, and the machine is a 5-year MACRS property. There will be an increase of $4,000 in net working capital. The firm's tax rate is 35% and its cost of capital is 10%. a. What is the expected after-tax salvage value of the new machine at the end of year 5? (3 pts.) $6,295 b. What is the new machines NPV? (3 pts.) $60,950.71