Barr Company is considering the replacement of its old murcking machine used in production. A new machine is available in the market that could substantially reduce annual operating costs. Selected data relating to the old and the new machines are presented below. Barr Company's desired rate of return is 10%. Purchase cost when new OLD MACHINE $ 20,000 $3,000 NEW MACHINE $ 25,000 Salvage value now Annual cash operating costs $ 15,000 $ 9,000 Repair needed immediately $4,000 Salvage value after 6 years $5,000 6 years 6 years Remaining life Required: By using the NPV method, decide whether Barr should buy the new machine or repair and continue using the old machine. (Note that, if the company buys the new machine, the old machine will be sold.)