PLEASE HELP WITH J-2 & K-1

Problem 12-33 Replacement decision analysis (LO12-4] Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $58,000. The equipment falls into the five-year category for MACRS depreciation and can currently be sold for $24,800. A new piece of equipment will cost $148,000. It also falls into the five-year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table 1212. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 4 5 6 Cash Savings $ 62,000 54,000 52,000 50,000 47,000 36,000 The firm's tax rate is 25 percent and the cost of capital is 12 percent. Year 1 $ 2 Answer is complete and correct. (1 - Tax Aftertax Savings Rate) Savings 62,000 0.75$ 46,500 54,000 0.75 40,500 52,000 0.75 39,000 50,000 0.75 37,500 47,000 0.75 35,250 36,000 0.75 27,000 3 4 5 6 j-1. Add the depreciation tax shield benefits and the aftertax cost savings to determine the total annual benefits. (Do not round intermediate calculations and round your answers to the nearest whole dollar.) Year 1 Answer is complete and correct. Tax Shield Aftertax Benefits Cost Total Annual from Benefits Savings Depreciation 4,616 46,500 $ 51,116 10,173 40,500 50,673 5,437 39,000 44,437 3,414 37,500 40,914 4,255 35,250 39,505 2,146 27,000 29,146 2 >> 3 OOOOOO 4 5 6 j-2. Compute the present value of the total annual benefits. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Answer is complete but not entirely correct. Total annual benefits $ 255,791.00 X k-1. Compare the present value of the incremental benefits (i) to the net cost of the new equipment (e). (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Net present value $ 46,230.00