One year ago, your company purchased a machine in manufacturing for $110,000. You have learnedthat a new machine is available that offers many advantages; you can purchase it for $150,000 today. Itwill be depreciated on a straight-line basis over 10 years, after which it has no salvage value. Youexpect that the new machine will produce additional EBITDA (Earnings before interest, taxes,depreciation and amortization) of $40,000 per year for the next 10 years. The current machine isexpected to produce additional EBITDA of $20,000 per year. The current machine is being depreciatedon a straight-line basis over a useful life of 11 years, after which it will have no salvage value, sodepreciation expenses for the current machine is $10,000 per year. All other expenses of the twomachines are identical. The market value today of the current machine is $50,000. Your companys taxrate is 45%, and the opportunity cost of capital for this type of equipment is 10%. Is it profitable to replace the year-old machine?