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ABC Company is considering replacing the latex molding machine it

uses to fabricate rubber chickens with a newer, more efficient model.

The old machine has a current book value of $$450,000$ and a remaining

useful life of $5$ years. The current machine would be worthless and

worn out in $5$ years, but ABC can sell it now for $$135,000.$ The old

machine is being depreciated by $$90,000$ per year for each year of its

remaining life. The new machine has a purchase price of $$775,000,$ an

estimated useful life and MACRS class life of $5$ years, and an estimated

salvage value of $$105,000.$ Depreciation rates per year are: $20\%,32\%,$

$19\%,12\%,11\%,$ and $6\%.$ The new machine is expected to save

$$185,000$ annually. The company's tax rate is $35\%,$ and its cost of

capital is $12\%.$ Find: The Initial Investment, the change in the PV of

the cash flows, the NPV$,$ and the IRR.