2. Suppose Teddy's, Inc. is considering the replacement of an old machine, which was purchased 4 years ago. The old machine has book value of $50,000 today and an expected remaining useful life of 3 years. Firm could sell it for $65,000 today or $12,000 in 3 years. The new machine has the following information: The new machine costs $200,000 with 3 years of useful life and a salvage value of $10,000. Both machines fall into asset class 39 with a CCA rate of 25%. After the purchase, the new machine will increase sales by $80,000, $90,000 and $95,000 in the next 3 years. Firm must invest $4,000 in NWC today, and then NWC must be maintained at 12% of sales. The discount rate is 10%, and the tax rate is 35%. Calculate the NPV of this replacement project.