Saved Help Save & Exit Submit Check my work PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $145 million with an as depreciation. The old equipment can be sold today for $100 million. A new modem This will have a 3-year life and will be depreciated to zero u firm to increase sales by $27 million per year and decrease operating costs by $14 million per year. At the end of 3 years, the new equipment will be worthless. Assurme the firm's tax rate is 35% and the discount rte for projects of this sort is 8%. on equipment sumed life of 5 years and an assumed salvage value of $15 million for tax purposes. The firm uses straight-line pool can be installed today for $180 million. sing straight-line depreciation. The new equipment will enable the a. What is the net cash flow at time 0 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.) Net cash flow 106 651 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.) Incremental cash flow million per year c. What are the NPV and IRR of the replacement project? (Do not round intermediate calculations. Enter the NPV in millions rounded to 2 decimal places. Enter the IRR as a percent rounded to 2 decimal places.) million NPV IRR