Atlantic Control Company $($ACC$)$ purchased a machine two years ago at acost of $$70,000.$ At that time, the machines expected economic lifewas six years and its salvage value at the end of its life wasestimated to be $$10,000.$ It is being depreciated using thestraight$-$line method so that its book value at the end of its six$-$yearlife is $$10,000.$ In four years, however, the old machine will have amarket value of $$0.$ A new machine can be purchased for $$80,000,$including shipping and installation costs. The new machine has aneconomic life estimated to be four years. MACRS depreciation will beused, and the machine will be depreciated over its $3-$year class liferather than its four$-$year economic life. $($See Table $13$A$-2$ in thetextbook at the end of this chapter for MACRS recovery allowancepercentages.$)$ During its four$-$year life, the new machine will reducecash operating expenses by $$20,000($excluding depreciation$)$ per year.Sales are not expected to change. But the new machine will require networking capital to be increased by $$4,000.$ At the end of its usefullife, the machine is estimated to have a market value of $$2,500.$ Theold machine can be sold today for $$20,000.$ The firms marginal taxrate is $40$ percent, and the appropriate required rate of return is $10$percent. a$.$ If the new machine is purchased, what is the amount of theinitial investment outlay at Year $0?$ b$.$ What supplemental operatingcash flows will occur at the end of Years $1$ through $4$ as a result ofreplacing the old machine? c$.$ What is the terminal cash flow at theend of Year $4$ if the new machine is purchased? d$.$ What is the NPV ofthis project? Should ACC replace the old machine?