Net cash flows Central 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 $$49,400,$ 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

$$75,400$ and requires $$4,400$ 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 $$54,600$ without incurring any removal or cleanup costs. The firm is subject to a

tax rate of $21\%.$ 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 table

$($Table

contains the applicable MACRS depreciation percentages.$)$ Note: The new machine will have no

terminal value at the end of $5$ years.

a$.$ Calculate the initial cash flow associated with replacement of the old machine by the new one.

b$.$ Determine the periodic cash flows associated with the proposed replacement. $($Note: Be sure to consider the depreciation in year

$6.)$

c$.$ Depict on a time line the net cash flows found in parts $($a$)$ and $($b$)$ associated with the proposed replacement decision.