Purple Turtle Group is a company that produces iWidgets, among several other products. Suppose that Purple Turtle Group considers replacing its old machine used to make iWidgets with a more efficient one, which would cost $2,000 and require $280 annually in operating costs except depreciation. After-tax salvage value of the old machine is $400 while its annual operating costs except depreciation are $1,200. Assume that, regardless of the age of the equipment, Purple Turtle Group's sales revenues are fixed at $2,500 and depreciation on the old machine is $400 Assume also that the tax rate is 40% and the project's risk-adjusted cost of capital, r, is the same as weighted average cost of capital (WACC) and equals 10% Based on the data, net cash flows (NCFs) before replacement are and they are constant over four years Although Purple Turtle Group's NCFs before replacement are the same over the 4-year period, its NCFs after replacement vary annually. The following table shows depreciation rates over four years Year 1 Year 2 Year 3 Year 4 Depreciation rates 33.33% 44.45% 14.81% 7.41% Complete the following table and calculate incremental cash flows in each year. Hint: Round your answers to the nearest dollar and remember to enter a minus sign if the calculated value is negative Year 0 Year 1 Year 2 Year 3 Year 4 $2,000 $400 New machine cost After-tax salvage value, old machine Sales revenues Operating costs except depreciation Operating income After-tax operating income Net cash flows after replacement (adding back depreciation) Incremental Cash Flows $2,500 $280 $2,500 $2,500 $280 $2,500 $280 $280