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 3 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 and 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

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

Incremental cash flow _____million per year

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

NPV _____million

IRR _____%