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

$145,000 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 $35,000 per year for the next 10 years.

The current machine is expected to produce a gross margin of $24,000 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 $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?

Please help me solve this! I am a bit confused.

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 $145,000 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 $35,000 per year for the next 10 years. The current machine is expected to produce a gross margin of $24,000 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 toda of the current machine is $50 000. Your company's ax rate is 45% and the opportunity cost of capital for this type of equipment is 10%. Should your company replace its year-old machine? The NPV of replacing the year-old machine is S.(Round to the nearest dollar.)