Holliday Manufacturing is considering the replacement of an existing machine. The new machine costs $1.2 million and requires installation costs of $150,000. The existing machine can be sold currently for $185,000 before taxes. It is 2 years old, cost $800,000 new, and has a $384,000 book value and a remaining useful life of 5 years. It was being depreciated under MACRS using a 5-year recovery period and therefore has the final 4 years of depreciation remaining. If held until the end of 5 years, the machine's market value would be $0. The new machine is exepcted to increase sales by $75,000 in year 1. Sales will increase by 5% per year each year after year 1. Over its 5-year life, the new machine should reduce operating costs by $350,000 per year. The new machine will be depreciated under MACRS using a 5-year recovery period. The new machine can be sold for $200,000 net of removal and clean up costs at the end of 5 years. An increased investment in net working capital of $25,000 will be needed to support operations if the new machine is acquired. Assume that the firm has adequate operating income against which to deduct any loss experienced on the sale of the existing machine. The firm has a 9% cost of capital and is subject to a 40% tax rate on both ordinary income and capital gains.

1. Develop the relevant cash flows needed to analyze the proposed replacement.
2. Determine the Net Present Value (NPV) of the proposal
3. Determine the Internal Rate of Return (IRR) and MIRR of the proposal.
4. What is the highest cost of capital the firm could have and still accept the proposal? Explain

It would be really helpful if you could show the steps. I am trying to learn how to do this in an Excel document.