Return to question PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $145 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 $100 million. A new modem pool can be This will have a 3-year life and will be depreciated to zero using straight-line depreciation. The new equipment will enable the installed today for $180 million. firm to increase sales by $27 million per year and decreas new equipment will be worthless. Assume the firm's tax rate is 35% and the discount rate for projects of this sort is 8%. operating costs by $14 million per year. At the end of 3 years, the a. What is the net cash flow at time O if the old equipment is replaced? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places) Answer is complete and correct. Net cash (82.45)million b. What are the incremental cash flows in years 1, 2, and 3? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places) 3 Answer is not complete. million per Incremental cash flow c. What are the NPV and IRR of the replacement project? (Do not round intermediate calculations. Enter the NPV rounded to 2 decimal places. Enter the IRR as a percent rounded to 2 decimal places) 3 Answer is not complete million NPV IRR roy3 of 5 Next >