ABC Company is considering replacing the latex molding machine it uses to fabricate rubber chickens with a newer, more efficient model. The old machine has a current book value of $450,000 and a remaining useful life of 5 years. The current machine would be worthless and worn out in 5 years, but ABC can sell it now for $135,000. The old machine is being depreciated by $90,000 per year for each year of its remaining life. The new machine has a purchase price of $775,000, an estimated useful life and MACRS class life of 5 years, and an estimated salvage value of $105,000. Depreciation rates per year are: 20%, 32%, 19%, 12%, 11%, and 6%. The new machine is expected to save $185,000 annually. The company’s tax rate is 35%, and its cost of capital is 12%. Find: The initial investment, the change in the PV of the cash flows, the NPV, and the IRR.