Hercules Exercise Equipment Company purchased a computerized measuring device two years ago for $$64,000.$ The equipment falls into the five$-$year category for MACRS depreciation and can currently be sold for $$27,800.$ A new piece of equipment will cost $$154,000.$ It also falls into the five$-$year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table $1212.$ Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Year Cash Savings

$1$ $ $65,000$

$257,000$

$355,000$

$453,000$

$550,000$

$639,000$

The firm$$s tax rate is $25$ percent and the cost of capital is $8$ percent.