PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $105 million on equipment with an assumed life of 5 years and an assumed salvage value of $11 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $80 million. A new modem pool can be installed today for $150 million. This will have a 30 year life and will be depreciated to zero using straight-line depreciation. The new equipment will enable the firm to increase sales by $25 million per year an decrease operating costs by $10 million per year. At the end of 0 years, the new equipment will be worthless. Assume the firm's tax rate is 35% and the discount rate for projects of this sort is 10%.

a. What is the net cash flow at time 0 if the old equipment is replaced?

Net cash flow ______ Million (I have 74.71 and it shows as wrong)

b. What are the incremental cash flows in years 1, 2 and 3?

Incremental cash flow _____ million per year (I have 40.25 and it shows as wrong)

c. What are the NPV and IRR of the replacement Project?

NPV _____ million (I have 25.69 and it shows wrong)

IRR _____ % ( I have 28.74 and it shows wrong)