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$$ advantages; you can purchase it for $$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 $$55,000$ per year for the next $10$ years. The current machine is expected to produce EBITDA of $$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 $$10,454\mathrm{.}55$ per year. All other expenses of the two machines are identical. The market value today of the current machine is $$50,000.$ Your$$ company's tax rate is $35\%,$ and the opportunity cost of capital for this type of equipment is $10\%.$ Is it profitable to replace the$$ year$-$old machine?

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Part $1$

The NPV of the replacement is $$$enter your response here. $($Round to the nearest$$ cent.$)$

Part $2$

Should your company replace its$$ year$-$old machine? $($Select the best choice$$ below.$)$

A$.$Yes comma there is a profit from replacing the machine.

Yes, there is a profit from replacing the machine.

B$.$No comma there is a loss from replacing the machine.

No$,$ there is a loss from replacing the machine.