Facebook runs many data warehouses full of servers. Assume that each existing server is $3$ years old and was bought for $$1,200.$ It could be sold for $$480$ now or for $$240$ in $2$ years. The annual cost of running the server $($for electricity, cooling and repairs$)$ is $$200.$

A new server costs $$1,100$ today and could be sold for $$137\mathrm{.}5$ in $5$ years. The annual cost of running it is $$150.$

Both types of servers are usable for $5$ years and are linearly depreciated to zero over $5$ years.

Facebook's marginal tax rate is $34\%$ and the appropriate cost of capital for this project is $8\%.$

Your task is to find out if Facebook should replace each server now or in two years.

What is the present value of all cash flows if a new server is bought once right now?

What is the present value of all cash flows if the old server is sold now, and the new server is bought now and then replaced every $5$ years at the same terms?

What is the present value of all cash flows for the next $2$ years if the old server is kept?

What is the present value of all cash flows if the server is first replaced in $2$ years, and then every $5$ years thereafter at the same terms?