One year ago, your company purchased a machine used in manufacturing for . You have learned that a new machine is available that offers many advantages and you can purchase it for 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 per year for the next 10 years. The current machine is expected to produce a gross margin of 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 per year. The market value today of the current machine is. Your company's tax rate is , and the opportunity cost of capital for this type of equipment is . Should your company replace its year-old machine?

The NPV of replacing the year-old machine is