of the 5-year MACRS (20%, 32%, 19%, 12%, 11%, and 6%). What is the NPV and IRR of the decision to replace the old machine? Should the old machine be replaced? (20 points) Howard Inc. is considering bidding for a contract to supply special purpose batteries to a manufacturer of electric cars. It will require the company to invest $25 million in plant and equipment to manufacture the batteries. The contract is expected to run for five years after which it will be discontinued. The plant and equipment purchased initially is expected to be sold for $5.0 million at the end of the contract in five years. The plant and equipment is expected to be depreciated on the basis of a 5-year MACRS schedule (20%, 32%, 19%, 12%, 11%, and 6.0% respectively). Net working capital required is expected to be 10% of next year sales. The company's tax rate is 21%. The contract requires supplying 1.5 million units of batteries in the first year. Beyond that, unit sales are expected to increase by 5%. The variable cost per unit for each battery is expected to be $450. The annual fixed costs are expected to be $5 million. The firm's cost of capital is 12%. If Howard decides to submit a bid indicating a selling price per unit of $485, what is the NPV of this contract? (15 points) What is the minimum bid price per unit Howard should indicate in order for the contract to be profitable? (5 points)