AP-21A LO 123 Rio Red Co. is interested in repla costs $96,700 with a useful lif can reduce annual maintenan $20,000 at end of its useful li for $2,000. ted in replacing its old machine. The machine the company is considering purchasing a useful life of ten years. By replacing the old machine with a new one, the company ol maintenance and repair costs by $7,900. In addition, the new machine can be sold for of its useful life. If the company decides to accept this project, they can sell the old machine Required a) Determine the payback period for the new machine. b) Assume the company ac le the company accepts projects if the payback period is less than the assets' useful life. Based on the payback method, should Big Red replace its old machine? C) Now assume Big Red wants ints to use the NPV technique with a required rate of return of 10%. Determine whether accept the project using the NPV method. the company should accept the project ment at which Toby would be indifferent to purchasing or leasing the car. Determine the lease payment at b) Determina