A company is considering replacing an old machine with a new one. The old machine is completely depreciated and can be sold for $100,000 in the market. The company intends to sell this machine if it is replaced. The new machine costs $400,000. The replacement of the machine will require an increase in the inventories by $200,000 in addition, accounts receivables will increase by $75,000. The new machine is going to be depreciated over 3 years to 0 salvage value. The new machine will increase annual revenue by $120,000 in addition it will reduce annual operating costs by $50,000. This new machine can be sold for $150,000 in 3 years. The projects life is 3 years. The companys tax rate is 30% and the cost of capital is 11%. What is the NPV of the project?

-15,368

-42,682

-108,509

101,725

61,403