The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $55,000. It had an expected life of 10 years when it was bought, and its remaining depreciation is $5,500 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 iffe. A new high-efficiency, digital-controlled flange-lipper can be purchased for $140,000, including installation costs. During its 5 -year life, it will reduce cash operating expenses by $35,000 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 5 th year since it will already be fully depreciated.). The old machine can be sold today for $45,000. The firm's tax rate is 25%, and the appropriate cost of capital is 14%. a. If the new flange-lipper is purchased, what is the amount of the initial Yash flow at Year 0? (Hint: you need to caiculate the book value of the old machine so you can calculate its after-tax salvage value.) Round your answer to the nearest dollar. Cash outfiow, 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. \begin{tabular}{lll} CF1 & s & \\ CF2 & s & \\ CF3 & s & \\ CF4 & s & \\ CF5 & s & \end{tabular}