Crane Sporting Goods is planning to buy a new equipment to replace the existing old equipment. The new equipment will not affect the firm's unlevered net

income or net working capital. The old equipment was purchased

$3$

$$years ago at a price of $

$1\mathrm{.}2$

$$million and follows a five

$-$

year straight

$-$

line depreciation

method. The old equipment has a market value of $

$0\mathrm{.}5$

$$million now and $

$0$

$$in the future. The new equipment will cost $

$1\mathrm{.}4$

$$million and follows a five

$-$

year

straight

$-$

line depreciation method. By the end of year five, the CFO expects to sell the new equipment for a price of $

$0\mathrm{.}6$

$$million$.$ What is the NPV of the

equipment replacement plan for the next five years at a discount rate of

$12$

$\%$

$?$

$$The marginal tax rate for the firm is

$25$

$\%$

$.$

A

$.$

$-$

$0\mathrm{.}046$

$$million

B

$.$

$-$

$0\mathrm{.}054$

$$million

C

$.$

$0\mathrm{.}035$

$$million

D

$.$

$0\mathrm{.}045$

$$million