Complete the table and answer this question: the net present value of this replacement project is _______The new equipment will have a cost of 1,800,000 end it will be depreciated on a straight line basis over a period of six years. The old machine is also being depreciated on a straight line basis. It has a book value of 200,000 with 4 more years of depreciation left. The new equipment will have a salvage value of zero dollars at the end of the projects life. The old machine has a current salvage value of 300,000. Replacing the old machine will require an investment in networking capital of 30,000 that will be recovered at the end of the products late. The new machine is more efficient, so the firms incremental earnings before interest and taxes will increase by a total of 500,000 in each of the next six years. Hint this value represents the difference between the revenues and operating costs generated using the new equipment that earned using the old equipment. The projects cost of capital is 13%. The companies annual rate is 30%.

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Initial investment EBIT - Taxes + A Depreciation X T + Salvage value - Tax on salvage - NOWC + Recapture of NOWC Total free cash flow