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 that you can purchase it for $170,000 today. The CCA rate applicable to both machines is 40%?; neither machine will have any? long-term salvage value. You expect that the new machine will produce earnings before? interest, taxes,? depreciation, and amortization (EBITDA?) of $50,000 per year for the next ten years. The current machine is expected to produce EBITDA of $23,000 per year. All other expenses of the two machines are identical. The market value today of the current machine is $50,000. Your? company's tax rate is 45%?, and the opportunity cost of capital for this type of equipment is 10%. Should your company replace its? year-old machine?

A) What is the NPV of? replacement? ??

?(Round to the nearest? dollar.)

B) Should your company replace its? year-old machine?

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

b) No, there is a loss from replacing the machine.