Excel Only Please Need to see formulas and solutions. Thank you.

Tough Steel, Inc. is a processor of stainless steel products. The firm is considering replacing an old stainless steel tube-making machine for a more cost-effective machine that can meet the firm's quality standards. - The old machine was acquired 2 years ago at an installed cost of $500,000. It has been depreciated under the MACRS's 5-year recovery period, and has a remaining economic life of 5 years. It can be sold today for $$350,000 before taxes, but if the firm decides to keep it, it can be sold for $100,000 before taxes at the end of year 5 . - The first option is Machine A, which can be purchased for $600,000, but will require $30,000 in installation costs. This machine would be depreciated under the MACRS's 3year recovery period. At the end of its economic life, the machine will have a salvage value of $350,000 before taxes. This machine would require an investment in net working capital of $100,000. - The second option is Machine B, which can be purchased for $$550,000, but requires $20,000 in installation costs. This machine would be depreciated under the MACRS's 5year recovery period. At the end of its economic life, the machine would have a salvage value of $330,000 before taxes. This machine requires no investment in net working capital. The firm has estimated the following EBIT for all three machines: The firm's WACC is 14% and its tax rate is 40%. a) Calculate the following cash flows for the old machine, machine A, and machine B : - initial investment, - annual after-tax cash flows for each year, and - the terminal cash flow. b) Determine which machine is more profitable for the company based on - the payback period, - discounted payback period, - net present value, - profitability index, - internal rate of return, and - modified internal rate of return. \begin{tabular}{|c|c|c|c|c|c|c|} \hline & Year 0 & Year 1 & Year 2 & Year 3 & Year 4 & Year 5 \\ \hline \multicolumn{7}{|l|}{ Old Machine } \\ \hline \multicolumn{7}{|l|}{ Machine A } \\ \hline \multicolumn{7}{|l|}{ Machine B } \\ \hline Operating Cash Flows & \multicolumn{6}{|c|}{ (a) Calculate the Cash Flows } \\ \hline \multicolumn{7}{|l|}{ Old Machine } \\ \hline \multicolumn{7}{|l|}{ Machine A } \\ \hline \multicolumn{7}{|l|}{ Machine B } \\ \hline \multicolumn{7}{|l|}{ Incremental Cash Flows } \\ \hline \multicolumn{7}{|l|}{ Machine A } \\ \hline \multicolumn{7}{|l|}{ Machine B } \\ \hline \multicolumn{7}{|c|}{ Initial Outlay \& Terminal Cash Flow } \\ \hline \multicolumn{7}{|l|}{ Machine A } \\ \hline \multicolumn{7}{|l|}{ Machine B } \\ \hline \multicolumn{7}{|l|}{ ATCF } \\ \hline \multicolumn{7}{|l|}{ Machine A } \\ \hline \multicolumn{7}{|l|}{ Machine B } \\ \hline & & & & & & \\ \hline & \multicolumn{6}{|c|}{ (b) Determine which machine is more profitable for the company? } \\ \hline & Machine A & Machine B & Best Choice? & & & \\ \hline Payback Period & \#NAME? & \#NAME? & \#NAME? & & & \\ \hline Discounted Payback & \#NAME? & "\#NAME? & \#NAME? & & & \\ \hline Net Present Value (NPV) & - & - & Machine A & & & \\ \hline Drofitahility Indev (DI) & \#DIV/OI & \#DIV/OI & \#DIV/OI & & & \\ \hline \end{tabular}