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by $ 1 0 , 0 0 0 per year. If the machine is not replaced, it can be sold for $ 1 0 ,

by $10,000 per year. If the machine is not replaced, it can be sold for $10,000 at the end of its useful life.
estimated to be worthless. The new machine is eligible for 100% bonus depreciation at the time of purchase.
The old machine can be sold today for $50,000. The firm's tax rate is 25%. The appropriate WACC is 9%.
$
b. What are the incremental cash flows that will occur at the end of Years 1 through 5? Round your answers to the nearest dollar.
Year 1
$
Year 2
$
Year 3
$
Year 4
$
Year 5
$
c. What is the NPV of this project? Do not round intermediate calculations. Round your answer to the nearest cent.
$
Should Darlington replace the old machine?
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