Replacement Project

A Firm is considering the Replacement of the Existing Equipment. The Firm's Marginal Tax Rate is $40\%.$

$-$ The Old Equipment was purchased two years ago at a cost of $$200$M with an expected useful life of $6$ years. The Old Equipment is depreciated on a Straight$-$Line Basis and can be sold today for $$110$M$.$ If not replaced, the Equipment will have a Salvage Value of $$20$M at the End of its Useful Life.

$-$ The New Equipment costs $$420$M$,$ requires an additional cost of $$80$M for Shipping and Installation, has an Estimated Life of $4$ Years and a Salvage Value of $$120$M$.$ The Equipment falls into MACRS $5-$Year Class and will Increase Revenues by $$80$M Per Year, while Reducing Operating Costs by $$25$M Per Year. The New Equipment requires an Increase in NWC of $$30$M at Year $0.$

$5-$Year MACRS: Year $1$: $20\%,$ Year $2$: $32\%,$ Year $3$: $19\%,$ Year $4$: $12\%,$ Year $5$: $11\%,$ Year $6$: $6\%$

What is the Cash Flow at Year $4?$