,

Although the Chen Company s milling machine is old, it is still in relatively good workingorder and would last for another 10 years.

It is inefficient compared to modern standards,though.

The new milling machine, would also last for 10 years and would produceafter-tax cash flows (labor savings and depreciation tax savings) of $19,000 per year. Itwould have zero salvage value at the end of its life. Should Chen buy the new machine?

at acost of $110,000 delivered and installed,

The project cost of capital is 10%, andits marginal tax rate is 35%.

PLEASE SHOW STEP BY STEP SOLUTION USING EXCEL SO I UNDERSTAND HOW WE GOT THE ANSWER.