Replacement Analysis The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $75,000. It had an expected life of 10 years when it was bought, and its remaining depreciation is $7,500 per year for each year of its remaining life. As older flange-lippers are robust and useful machines, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency, digital-controlled flange-lipper can be purchased for $120,000, including installation costs. During its 5-year life, it will reduce cash operating expenses by $30,000 per year, although it will not affect sales. The new equipment will have zero salvage value. MACRS depreciation will be used, and the machine will be depreciated over its 3- year class life rather than its 5-year economic life, so the applicable depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41% (There will be no depreciation in its 5th year since it will already be fully depreciated.). The old machine can be sold today for $35,000. The firm's tax rate is 25%, and the appropriate cost of capital is 12%. a. If the new flange-lipper is purchased, what is the amount of the initial cash flow at Year 0? (Hint: you need to calculate the book value of the old machine so you can calculate its after-tax salvage value.) Round your answer to the nearest dollar. Cash outflow, if any, should be indicated by a minus sign. $ b. What are the incremental net cash flows that will occur at the end of Years 1 through 5? Hint: Be sure to also include the annual depreciation tax savings and the after-tax opportunity cost of not selling the old machine at Year 5! Do not round intermediate calculations. Round your answers to the nearest dollar. Cash outflows, if any, should be indicated by a minus sign. CF1 $ CF2 $ CF3 $ CF4 CFs $ $ c. What is the NPV of this project? Do not round intermediate calculations. Round your answer to the nearest dollar. Negative value, if any, should be indicated by a minus sign. $ Should Everly replace the flange-lipper? -Select-