One year ago, your company purchase a machine used in its manufacturing operations for $2,200,000. You have just recently dicovered that a newly developed machine is now available that offers a number of technoleg machine. This new machine can be purchased for $3,000,000. It can be depreciated on a straight-line basis over 10 years. It is not expected to have any salvage value but it estimated that $200,000 will be required in clea new machine will also require an initial increase in working capital of $150,000 which will be recovered in year 10. You also expect that the new machine will produce a gross margin (revenue minus expenses other than depreciation) of $500,000 per year for the next 10 years The current machine is expected to produce a gross margin of $200,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, and has no salvage value. The existing machine could be sold now for $1,500,000. Your company's tax rate is 30%, and the cost of capital for this type of investment is 10%. dvantages when compared to the existing n-up and disposal costs at the end of the 10 years. The Required: (i) Calculate the initial cash outlay for replacing the existing machine with the new machine (ii) Calculate the incremental on-going free cash flows relating to the replacement. (ii) Calculate the terminal cash flows relating to the new project. (iv) What does the NPV rule say you should do? (Calculate the NPV and interpret your answer)