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One year ago; your company purchased a machine used a manulacturing for 505,000 . You have learned that a new machine is avallable that offers

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One year ago; your company purchased a machine used a manulacturing for 505,000 . You have learned that a new machine is avallable that offers many advantages and that you can purchase if for $140.000 today. The CCA rale applicabie to both machines is 20 S: ne ther machine will have any leng-term salvage value. You expect that the new machine wil produce oamings belore intersest taxes, depreciation, and amorization (EBITDA) of $55.000 per year for the next 10 years. The current machine is expected lo produce E8rTDA of $23.000 per year Al offer expenses of the two machnes are identical. The market value today of the curremt machine is $50.000. Your companys tax mase is 45%, and the opportunity cost of capial for this lype of equipment is 10%.5 rould your company replace is yeat-old machine? What is the NPV of replacement? The NPV of replacement is 1 (Round to the neares doliar.)

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