- The new piece of equipment will have a cost of $1,200,000, and it will be depreciated on a straight-tine basis over a period of five years. - The old machine is also being depreciated on a suaght-line basis, it has a bock valus of $200,000(at year 0 ) and three more years of depredabion left (550,000 per year ). - The new equiperent will have a salvage value of 50 at the end of the project's Ife (year 5). The old machine has a cucrent salvage value (at year 0) of $300.000. - Replacing the old machine will require an irvestrnent in net working capital (NwC) of 560,000 that will be recovered at the end of the project's life (year 5). - The newt machine is more efficent, so the incremental increase in operating income before taxes will increase by a total of $500,000 in each of the pext five years (Years 1-5). (Hint This value represents the difference between the revenues and operating coses (induding depreciatien expense) generated using the new equipment and that earned using the old equipment.) - The project's required rate of return is 13% - The company's annual tax rate is Jo\%. Complete the following table and compute the incremental cash flows associated wich the replacement of the old equipment with the new equipment. The net presern value (NDV) af this replacement project is