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Need answer to question 7 A,B,C,and D pls Check PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it

Need answer to question 7 A,B,C,and D pls

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Check PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $110 million on equipment with an assumed life of 5 years and an assumed salvage value of $20 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $80 million. A new modem pool can be installed today for $150 million. This will have a 3-year life and will be depreciated to zero using straight-line depreciation. The new equipment will enable the firm to increase sales by $24 million per year and decrease operating costs by $12 million per year. At the end of 3 years, the new equipment will be worthless. Assume the points firm's tax rate is 30% and the discount rate for projects of this sort is 8%. Required: eBook a. What is the net cash flow at time 0 if the old equipment is replaced? Print Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. b. What are the incremental cash flows in years: (1) 1; (ii) 2; (ii) 3? Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. c. What is the NPV of the replacement project? Note: Do not round intermediate calculations. Enter the NPV in millions rounded to 2 decimal places. d. What is the IRR of the replacement project? Note: Do not round intermediate calculations. Enter the IRR as a percent rounded to 2 decimal places. a. Net cash flow million b. Incremental cash flow million per year million c. NPV d. IRR

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