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Green Moose Industries is a company that produces iBooks, among several other products. Suppose that Green Moose Industries considers replacing its old machine used to

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Green Moose Industries is a company that produces iBooks, among several other products. Suppose that Green Moose Industries considers replacing its old machine used to make iBooks with a more efficient one, which would cost $1,800 and require $250 annually in operating costs except depreciation. After-tax salvage value of the old machine is $600, while its annual operating costs except depreciation are $1,100. Assume that, regardless of the age of the equipment, Green Moose Industries's sales revenues are fixed at $3,500 and depreciation on the old machine is $600. Assume also that the tax rate is 40% and the project's risk-adjusted cost of capital, r, is the same as weighted average cost of capital (WACC) and equals 10%, Based on the data, net cash flows (NCFs) before replacement are , and they are constant over four years. Although Green Moose Industries's NCFs before replacement are the same over the 4-year period, its NCFs after replacement vary annually. The following table shows depreciation rates over four years. Complete the following table and calculate incremental cash fiows in each year. Hint: Round your answers to the nearest dollar and remember to enter a minus sign if the calculated value is negative. Next evaluate the incremental cash flows by calculating the net present value (NPV), the internal rate of return (IRR), and the modified IRR (MIRR). Assume agoin that the cost of financing the new project is the same as the WACC and equals 10%. Hint: Use a spreadsheet program's functions or use a financial calculator for this task. Although Green Moose Industries's NCFs before replacement are the same over the 4 -vear period, its NCFs after replacement vary annually, The following table shows depreciation rates over four years. Complete the following table and calculate incremental cash flows in each year. Hint: Round your answers to the nearest dollar and remember to enter a minus sign if the caiculated value is negative. Next evaluate the incremental cash flows by calculating the net present value (NPV), the internal rate of retum (IRR), and the modifled IRR (MIRR). Assume again that the cost of financing the new project is the same as the WACC and equals 10%. Hint: Use a spreadsheet program's functions or use a financial calculator for this task. Based on the evaluation, replacing the old equipment appears to be a decision because

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