I will upvote your answer.

At times firms will need to decide if they want to continue to use their current equipment or replace the equipment with newer equipment. The company will need to do replacement analyes to determine which option is the best financial decision for the company. Price to sconderling replacing an existing place of equipment. The project involves the following: The new goment will have a cost of $1,800,000, and it is eligible for 100% bomus deprecation so it will be fully deprecated at 0 The old machine was purchased before the new tax law, so it is being depreciated on a straight-Ane bass. It has a book value of $200,000 (at year) and four more years of depreciation left (50,000 per year). the new edipment will have a salvage value of 50 at the end of the project's tre (vear 6). The old machen has a current salvage value (ar var ) of $300,000 enclating the old machine will require an investment in net operating working capital (NowC) ef 15.000 that will be recovered at the end of the project's life (year 6). The new machine is more efficient, so the firm's incremental earnings before interest and as CEBIT) will increase ber a total of $700,000 in each of the next six years (years 1-6). Hint: This value represents the difference between the revenues and operating couts Onduding depreciation expena) generated using the new vinent and that earned using the old cient . The project's cont of capitalists The company's annual taxis complete the following table and compute the incremental cash cated with the replacement of the oldest Year o Year Year 2 Year Year Years Trial investment LOIT Depreciation + Salvage value Taxon Salve - NOW Recapture NOWC Tocare cause The net present this 963,147 11.155.710 01.675 01.107.619