General Motors has approved a project 15 years ago and the project still has 20 years of remaining We today. The management replaced the old equipment with a new equipment today. The old equipment was purchased 15 years to at a cost of $30 million and was assumed to have no value at the end of its 35-year life. The new equipment costs $45 million and is assumed to have o value at the end of the project. The firm uses straight line depreciation. The new equipment decreases Operating Expenses by $5 million per year. since the new equipment is energy efficient. The marginal tax rate is 40%. If the firm replaces the old equipment now, free cash flows for the next year will decrease by $3.20 million increase by $3.56 million increase by $3.92 million increase by $3.38 million decrease by $3.70 million