Micah Corporation is trying to determine the initial investment required to replace an old

machine with a new one. The new machine costs $$68000.$ It will be depreciated under

MACRS, using a $5-$year recovery period. The $5-$year MACRS depreciation rates are:

The old machine was purchased $3$ years ago at a cost of $$49000$ and was being depreciated

under MACRS, using a $5-$year recovery period. The firm can sell the old machine for

$$22000.$ The firm expects that a $$11300$ increase in current assets and an $$2400$ increase in

current liabilities will accompany the replacement. The firm's tax rate is $21\%.$

The new machine and the old machine are associated with the following EBITDA $($earnings

before interest, taxes, depreciation and amortization$)$ over the $5-$year life of the project:

Assume that the firm expects to liquidate the new machine at the end of its $5-$year usable

life, to net $$16000$ after paying removal and cleanup costs. Had the new machine not

replaced the old machine, the old machine would have been liquidated after $5$ years to net

$$4000.$ The firm expects to recover its net working capital investment upon termination of

the project.

If the corporation's capital structure is $50\%$ debt and the rest of capital is equity, and the

corporation will continue this capital structure to fund the investment on the new machine.

Its cost of debt is $6\mathrm{.}33\%$ and cost of equity is $15\%.$ What is the NPV if Micah decides to do

the replacement $($when calculating WACC, please keep two decimal places for the

percentage such as $15\mathrm{.}38\%?$