Consider again the scenario in Problem 12.2. Suppose that the company has been offered the opportunity to purchase another printing machine for $15,000. Over its three-year useful life, the machine will reduce labor and raw-materials usage sufficiently to cut operating costs from $8,000 to $6,000. This reduction in costs will allow after-tax profits to rise by $2,000 per year. It is estimated that the new machine can be sold for $5,500 at the end of year 3. If the new machine were purchased, the old machine would be sold to another company rather than be traded in for the new machine. Suppose that the firm will need either machine (old or new) for only three years and that it does not expect a new, superior machine to become available on the market during the required service period. Assuming that the firm’s interest rate is 12%, decide whether replacement is justified now.