old machine with a new machine. The old machine has a tax basis or net book value of be sold for S1,800. The cost of the new machine is $17,300. If the company does buy the machine is kept instead of buying the new machine, the company will sell the old machine in change in their product line. It turns out that the company's net working capital will be the Once again, your co-worker Fred has done much of the work already. He did, though, forget (20 points) Assume a marginal tax rate of30% Your company is considering replacing an s5,500 now and can now be sold for $6,200. If the old machine is kept for another five and it could then years, the old machine would then have a tax basis or net book value of So new machine, it would then keep the new machine for five years and then sell it for $6,800 at which time the new machine's tax basis or net book value will be $8,300. Even if the old five years as the company will then no longer need either machine because of a planned same regardless whether or not the new machine replaces the old machine. to figure out the initial net incremental cash inflow. Also, at the end of the second year (time 2), he computed the net incremental cash inflows correctly except he did not take into account depreciation or any taxes. The depreciation for the second year would be $3,700 for the new machine if the company does purchase the new machine. On the other hand, the epreciation for the second year would be $1,400 for the old machine if the old machine is kept. In the fifth year, Fred actually did correctly take into account depreciation and taxes. Assume that his net incremental cash inflow at time 5 is correct except he account the salvage values of the new or old machines, effects of those sales did not take into nor did he take into account the tax Your task is to correct Fred's net incremental cash inflows for time 0, time 2, and time 5 the issues stated in the above paragraphs. Fred's net incremental cash inflows are shown in the table below: for time Fred's Net Corrected Net Incremental Incremental Cash Cash Inflows Inflows 0 0 2 $6,000 5 $8,000