Bottle Inc., an all-equity firm, plans to replace its old bottling machine with a new one. The current (old) machine was bought 10 years ago for $400 million, and is being depreciated straight-line to zero-salvage value (20-year depreciable life). It can be sold for $250 million today. It can produce, and the firm can sell, 10 million old bottle/year (cost: $5 each), at a price of $25/bottle for the next 10 years. The new machine costs $900 million and it will decrease working capital by $100 million. It is to be depreciated straight-line over its 10-year life to a zero-salvage value. The new machine can make both old and new bottle. The firm can sell 12 million new bottles and 3 million old bottles annually for 10 years. The new bottle (cost: $8/unit) can be sold for $30 each. Each old bottle still costs $5 and can still be sold for $25. If the discount rate (for all equity) is 10%, the risk-free rate is 5% and the tax rate is 20%, should the firm replace the old machine? Why? Assume that the depreciation tax shields are discounted at 10%.