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One year ago, your company purchased a machine used in manufacturing for 390.060. You havo learned that a new mochine is availible that offers many

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One year ago, your company purchased a machine used in manufacturing for 390.060. You havo learned that a new mochine is availible that offers many advantagos and that you can purchase it Sor $160,000 todary. The CCA rate applicable to both machines is 40%; nether machine wil have any long term salvage value. You expect that the new machine wir produce eamings belore interest, taxes, depreciation, and amotization (E8ITDA) of 355,000 per year for the nuxt 10 years. The current machine is expected to produce EaliTDA of 523,000 per year Al ather expenses of the two machines are identical. The market value today of the current machine is 550.000. Your compony tax rale is 35%, and the opportunity cost of capital for thin type of equigenent is 11% should your company replace its year-old machine? What is the NPV of replacement? The NPV of replacement is 4 (Round to the nearest doliar)

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