- The new equ pment will have a cost of 52,400,000, and it is eligible for 100% bonus depreciation so it will be fully depreciated at - The oid machine was purchased before the new tax law, so it is being depreciated on a straight-line basis, It has a book value of $200,000 (at year 0) and four more years of depreciation left ( $50,000 per year). - The new equipment will have a salvage value of $0 at the end of the project't life (year 6 ). The old machine has a current salyage value (at year 0) of $300,000. - Replacing the old machine will require an investment in net operating working capital (Nowc) of 530,000 that will be recovered at the end of the project's life (year 6 ). - The new machine is more efficient, so the firm's incremental earnings before interest and taxes (EBIT) will increase by a total of $500,000 in each of the next six years (years 1-6). Hint: This value represents the difference between the revenues and operating costs (onduting depecciation expense) generated using the new equipment and that earned using the old equipment. - The project's cost of capital is 13efi. - The company's annual tax rate is 25%. Complete the following table and compute the incremental cash fows associated with the replacement of the eld equipment with the new equipment