Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is oonsiderin g replacing an existing piece of equipment wi] a more sophisticated machine. The following information is given. Table 9.6 Facts Existing hiachine Proposed Machine Cost 2 $1. Cost 2 $15, Purchased 2 years ago Installation 2 $2, Depreciation using WC RS over Depreciationthe MACRS a 5year recover schedule 5year recovery schedule will he used Current market value : $1 5, Five year usahle life remain in g Five year usahle life expected Earnings before Depreciation and Taxes Exisling Machine Proposed Lia-chine Year 1 $l, Year 1 Emma 2 15mm 2 1?. 3 14mm 3 1?, 4 140nm 4 1?, 5 14mm 5 1?, The firm pays all} percent taxes on ordinary income and capital gains