A competitor had offered $35,000 cash for the machine, an amount that represented its current book value.

If the company opted to keep the machine, Magic would continue to claim depreciation of $6,000 per year for

each of the next five years, at which point the machine would be unserviceable and would be sold for $5,000

as scrap. If Davidson elected to keep and repair the old machine, it would require $28,000 to be spent

immediately and $7,000 in regular maintenance in each of the next five years. In Year 3, the machine would

require another investment of $4,000 for a larger scheduled service. the discount rate=11% tax rate=30% Find NPV.