You are tasked with evaluating whether the firm should replace a $8-$year old equipment. As you have learned from FIN$341$ at Western, analysis of a replacement type of project is better done by first assuming the replacement decision is made. So$,$ assume that the firm will be replacing this old equipment, what cash flows do you think are valid and relevant in the initial period?$$

I. Sales price of the old machine alone

II$.$Potential cost savings from using the new machine

III. The opportunity cost of losing the depreciation benefit from the old machine

IV$.$ After$-$tax salvage value from selling the old machine

V$.$ Purchase cost of a new machine alone

Group of answer choices

III, IV and V

IV and V

I, II and III

III and V

II$,$ III, IV and V