Problem $11-14$

Replacement Analysis

$$140,000$ per year for each year of its remaining life.

annual savings of $$245,000$ will be realized if the new machine is installed. The company's marginal tax rate is $35\%$ and the project cost of capital is $15\%.$

a$.$ What is the initial net cash flow if the new machine is purchased and the old one is replaced? Round your answer to the nearest dollar.

$

the nearest dollar.

c$.$ What are the incremental net cash flows in Years $1$ through $5?$ Do not round intermediate calculations. Round your answers to the nearest dollar.

d$.$ Should the firm purchase the new machine?

Support your answer. Do not round intermediate calculations. Round your answer to the nearest dollar.

NPV: $