5#13

St. Johns Alver Shipyards is considering the replacement of an 8 -year-old piveting machine wath a new one that will increase earnings before depreciation from $27,000 to $46,000 per year. The new machine will cost $85,000, and it will have an estimated life of 8 years and no salvage value. The new riveting machine is eligible for 100 th bonus depreciation at the time of purchase. The applicable corporate tax rate is 25%, and the firm's wACC is 12%. The old machine has been fully depreciated and has no salvage value. What is the NPV of the project? Negative value, if any, should be indicated by a minus sign. Round your answer to the nearest cent. 5 . Should the old riveting machine be replaced by the new one