One year ago, your company purchased a machine used in manufacturing for $ 95,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $ 150,000 today. It will be depreciated on a straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin (revenues minus operating expenses other than depreciation) of $ 55,000 per year for the next 10 years. The current machine is expected to produce a gross margin of $ 21,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, and has no salvage value, so depreciation expense for the current machine is $ 8,636 per year. The market value today of the current machine is $ 60,000. Your company's tax rate is 42 %, and the opportunity cost of capital for this type of equipment is 10 %. Should your company replace its year-old machine?

A.The NPV of replacing the year-old machine is $_____?

B.Should your company replace its year-old machine?(Select the best choice below.)

A.No, there is a loss from replacing the machine.

B.Yes, there is a profit from replacing the machine.