You are wondering whether to replace an old machine in your assembly line with a new machine. With the old machine, your annual production capacity is 9,200 units per year. The unit cost is $30.20, and you can sell each unit for $55.30. If you buy the new machine, the unit price goes up to $58.00 and the unit cost goes down to $28.20.

The new machine costs $200,000 today and it has an economic life of eight years. You will depreciate this asset to zero over that eight-year period. Yet, you believe that you can sell the machine for $12,000 by the end of its economic life.

Finally, the corporate tax rate is 15% and the WACC is 8.50%.

a. Based on the information above, please calculate the total cash flows of (replacement) project for each year.

b. Please calculate the NPV, profitability index (PI), and the discounted payback period (DPBP).

c. If you want the discounted payback period (DPBP) of this project to be 6 years, what should be the unit price (keeping all else constant) with the new machine?