PC Shopping Network may upgrade its modem pool. It last upgraded $2$ years ago, when it spent $$105$ million on

equipment with an assumed life of $5$ years and an assumed salvage value of $$15$ million for tax purposes. The firm uses

straight$-$line depreciation. The old equipment can be sold today for $$80$ million. A new modem pool can be installed

today for $$150$ million. This will have a $3-$year life and will be depreciated to zero using straight$-$line depreciation. The

new equipment will enable the firm to increase sales by $$35$ million per year and decrease operating costs by $$13$

million per year. At the end of $3$ years, the new equipment will be worthless. Assume the firm's tax rate is $30\%$ and the

discount rate for projects of this sort is $13\%.$

Required:

a$.$ What is the net cash flow at time $0$ if the old equipment is replaced?

Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter

your answer in millions rounded to $2$ decimal places.

b$.$ What are the incremental cash flows in years: $($i$)1$; $($ii$)2$; $($iii$)3?$

Note: Do not round intermediate calculations. Enter your answer in millions rounded to $2$ decimal places.

c$.$ What is the NPV of the replacement project?

Note: Do not round intermediate calculations. Enter the NPV in millions rounded to $2$ decimal places.

d$.$ What is the IRR of the replacement project?

Note: Do not round intermediate calculations. Enter the IRR as a percent rounded to $2$ decimal places.