one year ago, your company purchased a machine used in manufacturing for $115,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $165,000 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 $23,000 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 10,455 per year. The market value today of the current machine is $60,000. Your company's tax rate is 42%, and the opportunity cost of capital for this type of equipment is 12%.

Should your company replace its year old machine? What is the NPV of replacing the year old machine? Round to the nearest dollar.