Machine A was purchased last year for $20,000 and had an estimated MV of $2,000 at

the end of its six-year life. Annual operating costs are $2,000. The machine will perform

satisfactorily over the next five years. A salesperson for another company is offering a

replacement, Machine B, for $14,000, with an MV of $1,400 after five years. Annual

operating costs for Machine B will only be $1,400. A trade-in allowance of $10,400 has

been offered for Machine A. If the before-tax MARR is 12% per year, should you buy the

new machine?