Please complete in excel.

Case 4: To Replace or Not Replace, That is the Question MAD Inc. is considering the replacement of an existing machine. The new machine costs $950,000 and requires installation costs of $100,000. The existing machine can be sold currently for $400,000 before taxes. It is 3 years old, cost $800,000 new, and has a remaining useful life of 5 years. This old machine is/was being depreciated using 5-year simplified straight-line depre- ciation to zero and therefore has the final 2 years of depreciation remaining. If it is held until the end of 5 years, the old machine's market value will be $0. Over its 5-year useful life, the new machine should increase revenues by $60,000 and reduce operating costs by $300,000 per year. The new machine will be depreciated using 5-year MACRS depreciation. The new machine can be sold for $150,000 at the end of 5 years. An increased investment in working capital of $25,000 will be needed to support operations if the new machine is acquired. Assume the firm has adequate operating income against which to deduct any loss experienced on the sale of the existing machine. The firm has a 12% cost of capital and is subject to a 40% tax rate. 1. Determine the initial cost for the proposed replacement. 2. Determine the annual (non-terminal) operating cash flows for years 1 through 5 for the proposed replacement. 3. Determine the terminal cash flow for the proposed replacement at the end of year 5. 4. What is the net present value and internal rate of return for the proposed replacement? 5. Make a recommendation to accept or reject the replacement proposal, and justify your