Your company is considering the replacing an old machine with a more efficient model. The new machine costs $39,500, will last for 7 years and save $12,900 per year in expenses. The discount rate is 18% and the tax rate is 26%. The machine will be depreciated on a straight line basis to zero. The old machine is fully depreciated and can be sold today for $2,700.

A) what is the amount of initial investment required?
B) what is the after-tax gain on the sale of the old machine? The old machine is fully depreciated.
C) what is the amount of operating cash flow (OCF) per year?
D) what is the NPV of the project?