holiday manufacturing is considering replacing an existing machine. The new machine costs $1.2 million and requires installation costs of $150,000.

holiday manufacturing is considering replacing an existing machine. The new machine costs $1.2 million and requires installation costs of $150,000. The existing machine is 2 years old, cost $800,000 new, and has a book value (UCC) of $367,962. The current market value of the machine is $185,000. The machine could be used for 5 more years, when it would be worth $50,000. Over its 5-year life, the new machine should reduce operating costs by $350,000 per year. The CCA rate on the machine is 30 percent. The new machine could be sold for $250,000, net of removal and cleanup costs, at the end of 5 years. An increase investment in net working capital of $25,000 will be needed to support operations if the new machine is acquired. The firm has a 9 percent cost of capital and a 40 percent tax rate. Determine the NPV and IRR of the proposal