Relevant cash flows-No terminal value Central Laundry and Cleaners is considering replacing an existing piece of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of $47,700, and this amount was being depreciated under MACRS using a 5-year recovery period. The machine has 5 years of usable life remaining. The new machine that is being considered costs $75,500 and requires $4,200 in installation costs. The new machine would be depreciated under MACRS using a 5-year recovery period. The firm can currently sell the old machine for $54,800 without incurring any removal or cleanup costs. The firm is subject to a tax rate of 40%. The revenues and expenses (excluding depreciation and interest) associated with the new and the old machines for the next 5 years are given in the table 3. (Table 3 contains the applicable MACRS depreciation percentages.) Note: The new machine will have no terminal value at the end of 5 years. a. Calculate the initial investment associated with replacement of the old machine by the new one. b. Determine the incremental operating cash inflows associated with the proposed replacement. (Note: Be sure to consider the depreciation in year 6.) c. Depict on a time line the relevant cash flows found in parts (a) and (b) associated with the proposed replacement decision. Data Table Data Table Recovery year ck on the icon here in order to copy the contents of the data table below into a spreadsheet.) 3 years 33% 45% 15% 7% 5 years 20% 32% 7 years 14% 25% 18% 12% 10 yea 10% 18% 14% 12% 19% 12% 12% 5% 9% Year New machine Expenses (excluding depreciation and interest) $720,100 720,100 720,100 720,100 720,100 OOO OO AWN- 9% 9% 1 Old machine Expenses (excluding depreciation and interest) $659,400 659,400 659,400 659,400 659,400 9% 8% 7% 2 Revenue $749,900 749,900 749,900 749,900 749,900 4% 6% Revenue $673,200 675,200 679,200 677,200 673,200 3 6% 6% 5 11 4% 100% Totals 100% 100% 100%