one year ago, caffe viva coffee roasting co. purchased three small-batch coffee roasters for $3.3 million now in 2015, the company finds that new roasters that offer significant advantages are available. the new roasters can be purchased for $4.5 million, and have no salvage value. both the new and old roasters are expected to last until 2020. i.e for 5 yeras. managment anticipates that the new roasters will produce annual cash revenues of $750,000, while the current roasters are expectd to produce $600,000 cash a year. the current market value of the old roasters is $1.5 million, i.e. caffe viva decides to replace the old roasters with the new ones, they will receive additional $1.5 million dollar cash now. the company's hurdle rate is 10%.

Based on the above given information answer the following questions:

1) find the cash flows to be received or spent every year for the next 5 yeras if roasters are replaced:

a) an initiation i.e t=0 the net cash flow will be =

b) In the 1st year i.e. t=1 the replacement will create net cash of the amount =

c) in the 2nd year i.e. t=2 the replacement will create net cash of the amount=

d) in the 3rd year i.e t=3 the replacement will create net cash of the amount=

e) in the 4th year i.e t=4 the replacement will create net cash of the amount=

f) in the 5th year i.e t=5 the replacement will create net cash of the amount=

2) create a timeline for this "roster replacement" project and calculate npv and irr

3) ignoring possible taxes on sale of used equipment should caffe viva replace its year-old roasters?