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B eBook St. Johns Rover Shipyards is considering the replacement of an 8 year-old riveting machine with a new one that will increase eamings before

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B eBook St. Johns Rover Shipyards is considering the replacement of an 8 year-old riveting machine with a new one that will increase eamings before depreciation from $24,000 to 554,000 per year. The new machine will cost $80,000, and it will have an estimated We of 8 years and no salvage value. The new riveting machine is eligible for 100% bonus deprecation at the time of purchase. The applicable corporate tax rates 25%, and the firm's WACC is 14%. The old machine has been fully deprecated and has no salvage Value What is the NPV of the project? Negative valoe, ton, should be indicated by a mnus sp. Mound your answer to the nearest cent. $ Should the old weting machine be replaced by the new one? Seina Select Yes No

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