Find the present value.

The new equipment will have a cost of $1,800,000, and it will be depreciated on a straight-line basis over a period of six years (years 16 ). - The old machine is also being depreciated on a straight-line basis. It has a book value of $200,000 (at year 0 ) and four more years of depreciation left ( $50,000 per year). - The new equipment will have a salvage value of $0 at the end of the project's life (year 6 ). The old machine has a current salvage value (at year 0 ) of $300,000. - Replacing the old machine will require an investment in net operating working capital (NOwC) of $60,000 that will be recovered at the end of the project's life (year 6). - The new machine is more efficient, so the firm's incremental earnings before interest and taxes (EBIT) will increase by a total of $700,000 in each of the next six years (years 1-6). Hint: This value represents the difference between the revenues and operating costs (including depreciation expense) generated using the new equipment and that earned using the old equipment. - The project's cost of cepital is 13%. - The company's annual tax rate is 40%. Complete the following table and compute the incremental cash flows associated with the replacement of the old equipment with the new-equipmen The net present value (NPV) of this replacement project is: $1,158,331. $1,332,081. $1,389,997. $868,748