I need help with part B Answers are given but I need excel functions to help me get those numbers. Please show functions and I'll thumbs up!

Net cash flowsNo terminal valueCentral Laundry and Cleaners is considering replacing an existing piece of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of $61,400,and this amount was being depreciated under MACRS using a 5-year recovery period. The machine has 5 years of usable life remaining. The new machine that is being considered costs $86,200and requires $4,200 in installation costs. The new machine would be depreciated under MACRS using a 5-year recovery period. The firm can currently sell the old machine for$54,600without incurring any removal or cleanup costs. The firm is subject to a tax rate of 40%.The revenues and expenses (excluding depreciation and interest) associated with the new and the old machines for the next 5 years are given in the table1.

(Table2contains the applicable MACRS depreciation percentages.) Note: The new machine will have no terminal value at the end of 5 years.

a. Calculate the initial investment associated with replacement of the old machine by the new one.

b. Determine the incremental operating cash inflows associated with the proposed replacement. (Note: Be sure to consider the depreciation in year 6.)

c. Depict on a time line the relevant cash flows found in parts

(a) and (b) associated with the proposed replacement decision.

U Year 1 New machine Expenses (excluding depreciation and interest) $718,000 718,000 718,000 718,000 718,000 Revenue $751,300 751,300 751,300 751,300 751,300 Nm* O Old machine Expenses (excluding depreciation and interesti $667,000 667,000 667,000 667,000 667,000 Revenue $676,000 678,000 682,000 680,000 676,000 10 years 4 Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 3 years 5 years 7 years 1 33% 20% 14% 10% 45% 32% 25% 18% 15% 19% 18% 14% 7% 12% 12% 12% 5 12% 9% 9% 5% 9% 8% 9% 7% 8 4% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. NM N 000 6 6% a. Calculate the initial investment associated with replacement of the old machine by the new one. To calculate the book value of old machine, use the following formula: Book value = Initial cost - Accumulated depreciation. Therefore, Book value= $61,400 - $61,400 (20% +32% +19%) = $17,806. The book value of the old machine is $17,806. To calculate the total tax on the sale of the old asset, use the following formula: Tax = Tax on capital gain + Tax on recaptured depreciation. Therefore, Tax = ($54,600 - $61,400) x40% +($61,400 - $17,806) 40% = $14,718. The total tax on the sale of the old asset is $14,718. The initial investment will be: $ 86,200 4,200 90,400 Cost of new asset Installation costs Total cost of new asset Proceeds from sale of old asset Tax on sale of old asset Total proceeds, sale of old asset $ (54,600) 14,718 $ (39,882) Initial investment 50,518 part B. The calculation of the cash flows with the new machine and the incremental cash flows are shown below: 2 3 33,300 $ Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes 1 33,300 $ 18,080 15,220 $ 6,088 28,928 $ 4,372 $ 1,749 2,623 $ 33,300 17,176 16,124 6,450 9,674 $ 9,132 $ Net profit after taxes Operating cash inflows $ 27,212 $ 18,865 $ 31,551 $ 22,004 $ 26,850 16,622 Incremental cash flows $ 4 5 6 Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes 33,300 $ 10,848 22,452 $ 8,981 13,471 24,319 $ 33,300 $ 10,848 22,452 $ 8,981 EP 4,520 (4,520) (1,808) (2,712) 1,808 1,808 $ Net profit after taxes Operating cash inflows $ 13,471 24,319 $ 18,919 $ Incremental cash flows $ 16,519 $ The calculation of the cash flows with the old machine is shown below: Year 1 2 3 $ Profit before depreciation and taxes Depreciation Net profit before taxes Taxes 9,000 $ 7,368 1,632 $ 15,000 3,070 $ 11,000 $ 7,368 3,632 $ 1,453 2,179 $ 9,547 $ 11,930 4,772 653 Net profit after taxes $ 979 $ 7,158 10,228 $ Operating cash inflows 8,347 $ Year 4 6 13,000 $ 9,000 $ O Profit before depreciation and taxes Depreciation Net profit before taxes 0 0 0 $ 0 9,000 $ 3,600 Taxes 13,000 $ 5,200 7,800 $ 7,800 $ Net profit after taxes $ 5,400 $ $ Operating cash inflows 5,400 $ 0 c. Depict on a time line the relevant cash flows found in parts (a) and (b) associated with the proposed replacement decision. The time line for the incremental cash flows is shown below: Year 0 2 3 5 6 - $16,622 4 + $16,519 Cash flow - $50,518 $18,865 $22,004 $18,919 $1,808 U Year 1 New machine Expenses (excluding depreciation and interest) $718,000 718,000 718,000 718,000 718,000 Revenue $751,300 751,300 751,300 751,300 751,300 Nm* O Old machine Expenses (excluding depreciation and interesti $667,000 667,000 667,000 667,000 667,000 Revenue $676,000 678,000 682,000 680,000 676,000 10 years 4 Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 3 years 5 years 7 years 1 33% 20% 14% 10% 45% 32% 25% 18% 15% 19% 18% 14% 7% 12% 12% 12% 5 12% 9% 9% 5% 9% 8% 9% 7% 8 4% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. NM N 000 6 6% a. Calculate the initial investment associated with replacement of the old machine by the new one. To calculate the book value of old machine, use the following formula: Book value = Initial cost - Accumulated depreciation. Therefore, Book value= $61,400 - $61,400 (20% +32% +19%) = $17,806. The book value of the old machine is $17,806. To calculate the total tax on the sale of the old asset, use the following formula: Tax = Tax on capital gain + Tax on recaptured depreciation. Therefore, Tax = ($54,600 - $61,400) x40% +($61,400 - $17,806) 40% = $14,718. The total tax on the sale of the old asset is $14,718. The initial investment will be: $ 86,200 4,200 90,400 Cost of new asset Installation costs Total cost of new asset Proceeds from sale of old asset Tax on sale of old asset Total proceeds, sale of old asset $ (54,600) 14,718 $ (39,882) Initial investment 50,518 part B. The calculation of the cash flows with the new machine and the incremental cash flows are shown below: 2 3 33,300 $ Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes 1 33,300 $ 18,080 15,220 $ 6,088 28,928 $ 4,372 $ 1,749 2,623 $ 33,300 17,176 16,124 6,450 9,674 $ 9,132 $ Net profit after taxes Operating cash inflows $ 27,212 $ 18,865 $ 31,551 $ 22,004 $ 26,850 16,622 Incremental cash flows $ 4 5 6 Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes 33,300 $ 10,848 22,452 $ 8,981 13,471 24,319 $ 33,300 $ 10,848 22,452 $ 8,981 EP 4,520 (4,520) (1,808) (2,712) 1,808 1,808 $ Net profit after taxes Operating cash inflows $ 13,471 24,319 $ 18,919 $ Incremental cash flows $ 16,519 $ The calculation of the cash flows with the old machine is shown below: Year 1 2 3 $ Profit before depreciation and taxes Depreciation Net profit before taxes Taxes 9,000 $ 7,368 1,632 $ 15,000 3,070 $ 11,000 $ 7,368 3,632 $ 1,453 2,179 $ 9,547 $ 11,930 4,772 653 Net profit after taxes $ 979 $ 7,158 10,228 $ Operating cash inflows 8,347 $ Year 4 6 13,000 $ 9,000 $ O Profit before depreciation and taxes Depreciation Net profit before taxes 0 0 0 $ 0 9,000 $ 3,600 Taxes 13,000 $ 5,200 7,800 $ 7,800 $ Net profit after taxes $ 5,400 $ $ Operating cash inflows 5,400 $ 0 c. Depict on a time line the relevant cash flows found in parts (a) and (b) associated with the proposed replacement decision. The time line for the incremental cash flows is shown below: Year 0 2 3 5 6 - $16,622 4 + $16,519 Cash flow - $50,518 $18,865 $22,004 $18,919 $1,808