One year ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages, you can purchase it for $150,000 today. It will be depreciated on a straight line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes depreciation, and amortization) of $40,000 per year for the next ten years. The current machine is expected to produce EBITDA of $20,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, after which it will have no salvage value, so depreciation expense for the current machine is $10,000 per year. All other expenses of the two machines are identical. The market value today of the current machine is $50,0 capital for this type of equipment is 10%. Is it profitable to replace the year-old machine? The NPV of the replacement is $ . (Round to the nearest dollar.) Should your company replace its year-old machine? (Select the best choice below.) O A. Yes, there is a profit from replacing the machine OB. No, there is a loss from replacing the machine Click to select your answer(s). Benchmark Metrics Inc. (BMI), an all-equity financed firm, reported EPS of $5.67 in 2013. Despite the economic downturn, BMI is confident regarding its current investment opportunities. But due to the financial crisis, BMI does not wish to fund these investments externally. The Board has therefore decided to suspend its stock repurchase plan and cut its dividend to $0.75 per share (vs almost $2 per share in 2012), and retain these funds instead. The firm has just paid the 2013 dividend, and BMI plans to keep its dividend at $0.75 per share in 2014 as well. In subsequent years, it expects its growth opportunities to slow, and it will still be able to fund its growth internally with a target 40% dividend payout ratio, and reinitiating its stock repurchase plan for a total payout rate of 62%. (All dividends and repurchases occur at the end of each year.) Suppose BMI's existing operations will continue to generate the current level of earnings per share in the future. Assume further that the return on new investment is 15%, and that reinvestments will account for all future earnings growth (if any). Finally, assume BMI's equity cost of capital is 10% a. Estimate BMI's EPS in 2014 and 2015 (before any share repurchases) b. What is the value of a share of BMI at the start of 2014 (end of 2013)? Hint Make sure to round all intermediate calculations to at least four decimal places a. Estimate BMI's EPS in 2014 and 2015 (before any share repurchases). BMI's EPS in 2014 is $ (Round to the nearest cent.) BMI's EPS in 2015 is $ (Round to the nearest cent.) b. What is the value of a share of BMI at the start of 2014 (end of 2013)? The value of a share of BMI at the start of 2014 is $ (Round to the nearest cent.) Enter your answer in each of the answer boxes