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5) Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Two models are available: Machine 190-3, which has a cost of $190,000, a 3-year expected life, and after-tax cash flows of $87,000 per year; and Machine 360-6, which has a cost of $360,000, a 6-year life, and after-tax cash flows of $98.300 per year. If the company chooses to buy the Machine 190-3, it will have to buy one machine now and a second machine in three years, the project will still last six years total. Knitting machine prices are not expected to rise. Assume that Filkins' cost of capital is 14%. Should the firm replace the old knitting machine, and, if so, which new machine should it use? a) NPV(190-3) = $20,070, NPV(360-6) = $22,256; Choose 360-6