One year ago, your company purchased a machine used in manufacturing for $$90,000.$ You have learned that a new

machine is available that offers many advantages; you can purchase it for $$140,000$ today. It will be depreciated on

a straight$-$line basis over $10$ 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 $$35,000$ per year for the next $10$ years. The

current machine is expected to produce EBITDA of $$22,000$ 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 $$8,181\mathrm{.}82$ 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 $12\%.$ Is it profitable to replace the year$-$old machine?

The NPV of the replacement is $

$($Round to the nearest cent.$)$

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.