Finance NPV Thanks in advance

5. ABC & Co. is considering whether to replace an existing machine or to spend money on revamping it. ABC & Co. currently pays no taxes. The replacement machine costs 18,00,000 now and requires maintenance of * 2,00,000 at the end of every year for eight years. At the end of eight years, it would have a salvage value of 4,00,000 and would be sold. The existing machine requires increasing amounts of maintenance each year and its salvage value fall each year as follows: Year Maintenance (7) Salvage (3) Present 0 8,00.000 1 2,00.000 5,00,000 2 4,00.000 3,00,000 3 6,00,000 2,00,000 4 8,00.000 0 The opportunity cost of capital for ABC & Co. is 15%. REQUIRED: When should the company replace the machine? The following present value table is given for you: Present value of 1 at Year 15% discount rate 1 0.8696 2 0.7561 3 0.6575 4 0.5718 5 0.4972 6 0.4323 7 0.3759 . o nnn