Book & Accounting Bookstore has used an old coding machine for 3 years and to buy a new coding machine to help control book inventories. The price of new machine is $35,000 and it requires working capital of $4,000. Its estimated useful life is 5 years and estimated salvage value for the calculation of depreciation is $5,000. The disposal value of the new machine will be $6,000 at the end of its useful life. Recovery of working capital will be $4.000 at the end of its useful life. Annual cash op incomes of the new machine will be $20,000. The disposal value of the old machine at the time of replacement is $6,500. The old machine requires working capital of $6,000 and is expected to have zero disposal value at the end of the five-year life. Annual cash operating incomes of the old machine are $10,000. The company has a required rate of return of 14%. The income tax rate is 30%. New $35,000 Purchase Price Current disposal value Useful Life Disposal value at the end Estimated Salvage value Annual Depreciation Working capital Before-tax operating income Old $40,000 $6,500 5 years $ 0 $ 0 $ 8,000 $ 6,000 $10,000 5 years $ 6,000 $5,000 $ 6,000 $ 4,000 $20,000 Income tax rate = 30% Required Rate of Return = 14% Present value factor of $1 for 5 periods at 14% =0.519 Present value factor of annuity for 5 periods at 14% = 3.433 Required: compute the net present value considering the tax effects of cash flows whether the company should buy a new coding machine or your works.) tax effects of cash flows and determine