QUESTION 1 The next 4 Questions are based on the following: A company is evaluating the replacement of an old machine with a new one. Last year, the company hired a consultant to conduct a feasibility study about this replacement project, which cost them 51,500,000 at that time. The consulting fees were expensed last year. The old machine was purchased 2 years ago for $2.5 million and was being depreciated using MACRS 5-year class (20%, 32%, 19.2%, 11.52%, 11.52% and 5.76%). The old machine can be sold for $750,000 at this time. The company intends to sell the old machine. The replacement machine has a cost of $4 million, an estimated useful life of 4 years. This machine will be depreciated over four years using straight-line method to 0 salvage value. The replacement machine would permit an output expansion, so sales would rise by $2 million per year, even so, the new machine's much greater efficiency would cause operating expenses to decline by $500,000 per year. The new machine would require that inventories be increased by $1 million, but accounts payable and accrued expenses would simultaneously increase by $500,000 and $300,000 respectively. The interest expense on the debt component of the capital required for this project will be $500,000 annually. The new machine can be sold for $250,000 at the end of 4 years to another company The company's marginal federal-plus-state tax rate is 21%, and its WACC is 12% What is the cash flow the initial investment at time 0? 0 -3.750 400 0 -3,355,500 0 -4,050,300 0 -4,800,400 O -2,950,000 Click Save and Submit to save and submit. Click Save All Answers to save all answers, QUESTION 2 Based on the information given in Problem 1, what is the cash flow at time 1 (the cash flow to be used for NPV calculation)? O 2,672,800 O 3,244,300 O 2,084,200 O 1,914,600 O 3,024,500 QUESTION 3 Based on the information given in Problem 1, what is the terminal value or the non-operating cash flow for time 4? 0 397,500 0 460,300 O 496,300 0 345,600 O 418,200 QUESTION 4 Based on the information given in Problem 1. what is the NPV of the project? O 3,333,245.94 0 4,294,364.28 0 4,051,384.17 O 5,347,284.30 0 2,108,384.15