Graham Company currently uses four machines to produce 400,000 units annually. The machines were bought three years ago for $50,000 each and have an expected useful life of 10 years with no salvage value. These machines cost a total of $30,000 per year to repair and maintain.

The company is considering replacing the four machines with one technologically supe- rior machine capable of producing 400.000 units annually by itself. The machine would cost

$ 140,000 and have an estimated useful life of seven years with no salvage value. Annual repair and maintenance costs are estimated at $14,000.

Assuming straight-line depreciation and a 40% tax rate, determine the annual additional after- tax net cash inflow if the new machine is acquired. mk5