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One yoar ago, your compary purchased a mochine used in manufacturing for $00,000. You have leamed that a new machine is avilable frat offors many

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One yoar ago, your compary purchased a mochine used in manufacturing for $00,000. You have leamed that a new machine is avilable frat offors many adwantages and you can purchase it for $170,000 today, it will be degrociated on a stroight- line beisis over 10 years and has no salvege valus. You mpoct that the new machine will produce a gross margin (reverues minus operating expenses other than depreciation) of $50,000 per yoar for the next 10 years. The current machine is expected to produce a gross marpin of $23,000 per yoar. The current machine is being depreciatod on a straight-fine basis over a usetul life of 11 years, and has no salrage value, so depreciation oxpenso for the current machine is 36,182 por year. The markot value today of the curre machine is 565,000 . Your company's tax rate is 42\%, and the coportunity cost of captal for this typo of equipenent is 10%. 5 hould your compary replace its year-old machina? The NPV of replacing the year-old machine is ! (Round to the nearest dollar.) Should your company roplace its year-old machine? (Seloct the best choice below.)

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