Question: please show excel formulas XYZ Co is evaluating to replace the existing two year old computers that cost $40 million with an original life of

please show excel formulas
please show excel formulas XYZ Co is evaluating to replace the existing

XYZ Co is evaluating to replace the existing two year old computers that cost $40 million with an original life of 5 years. The cost of the new computers is $90 million. The new computers will be depreciated to zero book value using straight-line over 3 years. The existing computers has a salvage value of $5 million and a book value of $24 million. The new computers will reduce operating expenses by $38 million a year. The new computers will have a salvage value of $9 million and a book value of zero in three years. XYZ has an income tax rate of 25%. You MUST label your answers with number and alphabets such as 8.a, 8.b, etc. 8. a. Determine the initial cash flow of the investment at time 0. 8. b. Determine the operating cash flows of the investment for the next three years. 8. c. Determine the terminal cash flow of the investment. 8. d. Should this replacement be taken? Explain. Assume cost of capital of 12%

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