A machine currently in use was originally purchased 2 years ago for $40,000 . Themachine is being depreciated under MACRS using a 5-year recovery period ; it has 3 years of usable life remaining. The current machine can be sold today to net $42,000 after removal and cleanup costs. A new machine, using a 3-year MACRS recovery period, can be purchased at a price of $140,000. It requires $10,000 to install and has a 3-year usable life. If the new machine is acquired, the investment in accounts receivable will be expected to rise by $10,000 , the inventory investment will increase by $25,000 and accounts payable will increase by $15,000. Earnings before depreciation, interest, and taxes are expected to be $70,000 for each of the next 3 years with the old machine and to be $120,000 in the first year and $130,000 in the second and third years with the new machine. At the end of 3 years, the market value of the old machine will equal zero, but the new machine could be sold to net $35,000 before taxes. The firm is subject to a 40% tax rate. (20%, 32%.19%, 12%, 12% and 5%% contains the applicable5yearsMACR5 depreciation percentages.)& ( 3 years MACRS,33%,45%,15%and 7%).a. Determine the initial investment associated with the proposed replacement decision.b. Calculate the incremental operating cash inflows for years 1 to 4 associated with the proposed replacement. (Note: Only depreciation cash flows must be considered in year 4.)c. Calculate the terminal cash flow associated with the proposed replacement decision