COMPREHENSIVE PROBLEM Woodruff Corporation (Replacement decision analysis) (LO12-4) The Woodruff Corporation purchased a piece of equipment three years ago for $230,000. It has an asset depreciation range (ADR) midpoint of eight years. The old equipment can be sold for $90,000. A new piece of equipment can be purchased for $320,000. It also has an ADR of eight years. page 417 Assume the old and new equipment would provide the following operating gains (or losses) over the next six years: FOUNDATIONS OF FINANCIAL MANAGEMENT New Old Equipment Equipment Year 1 $80,000 $25,000 2 76,000 16,000 3 70,000 9,000 4 60,000 8,000 5 50,000 6,000 6 45,000 (7,000) The firm has a 25 percent tax rate and a 9 percent cost of capital. Should the new equipment be purchased to replace the old equipment