$($Table $$ contains the applicable MACRS depreciation percentages.$)$

a$.$ Calculate the initial cash flow associated with the replacement of the existing grinder by the new one.

b$.$ Determine the periodic cash flows associated with the proposed grinder replacement. $($Note: Be sure to consider the depreciation in year $6.)$

c$.$ Determine the terminal cash flow expected at the end of year $5$ from the proposed grinder replacement.

d$.$ Depict on a time line the net incremental cash flows associated with the proposed grinder replacement decision.

a$.$ Calculate the initial cash flow associated with replacement of the old machine by the new one.

Calculate the initial cash flow below: $($Round to the nearest dollar.$)$

Data table

$*$These percentages have been rounded to the nearest whole percent to simplify $0$

retaining realism. To calculate the actual depreciation for tax purposes, be sure to

unrounded percentages or directly apply double$-$declining balance $(200\%)$ deprec

Data table

convention.

$($Click on the icon here in order to copy the contents of the data table below

into a spreadsheet.$)$