Marion Dexter Company is evaluating a proposal to purchase a new machine that would cost $100,000 and have a salvage value of $10,000 in four years. It would provide annual operating cash savings of $10,000, as follows:

	Old Machine	New Machine
Salaries	$40,000	$36,000
Supplies	7,000	5,000
Maintenance	9,000	5,000
Total	$56,000	$46,000

If the new machine is purchased, the old machine will be sold for its current salvage value of $20,000. If the new machine is not purchased, the old machine will be disposed of in four years at a predicted salvage value of $2,000. The old machine's present book value is $40,000. If kept, in one year the old machine will require repairs predicted to cost $35,000. Marion Dexter's cost of capital is 14 percent. Required: Should the new machine be purchased? Why or why not?

NEED THE ANSWER ASAP