REPLACEMENT ANALYSIS The Bigbee Bottling Company is contemplating the replacement of one of its botting machines with a newer and more efficient one. The old machine has a book value of $575,000 and a remaining useful life of 5 years. The firm does not expect to realize any return from scrapping the old machine in 5 years, but t can sell it now to another fim in the industry for $280,000. The old machine is being depreciated by $115,000 per year, using the straight-line method. The new machine has a purchase price of $1,100,000, an estimated useful life and MACRS Cassife of 5 years, and an estimated salvage value of $130,000. The applicatie depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. It is expected to economize on electric power usage, labor, and repair costs, as well as to reduce the number of defective bottles. In total, an annual savings of $200,000 will be realized if the new machine is installed. The company's marginal tax rate is 35%, and has a 12% WACC a. What initial cash outlay is required for the new machine? Round your answer to the nearest dolar. Negative amount should be indicated by a minus sign b. Calculate the annual depreciation allowances for both machines and compute the change in the annual depreciation expense of the replacement is made. Round you answers to the nearest dollar. Year Depreciation Depreciation Change in Allowance, Allowance, Old Depreciation New 1 2 3 4 5 c. What are the incremental net cash flows in Years 1 through 57 Round your answers to the nearest dollar. Year 2 Year 1 Year 4 Year 3 Year 5 d. Should the firm purchase the new machine? Select and considered the varit