Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine.

Existing Machine

Cost = $100,000

Purchased 2 years ago

Depreciation using MACRS over 5-year recovery schedule

Current market value = $105,000

Five year usable life remaining

Proposed Machine

Cost = $150,000

Installaion = $20,000

Depreciation - the MACRS a 5-year recovery schedule will be used

Five year usable life expected

Earnings before Depreciation and Taxes

Existing Machine

Year

1 $160,000

2 $150,000

3 $140,000

4 $140,000

5 $140,000

Proposed Machine

1 $170,000

2 $170,000

3 $170,000

4 $170,000

5 $170,000

The firm pays 40% taxes on ordinary income and capital gains

CALCULATE/SUMMARIZE THE INCREMENTAL AFTER-TAX CASH FLOW (RELEVANT CASH FLOWS) FOR YEARS t=0 THROUGH t=5

please show all work and steps to solution. Thanks!