Q1. Suppose Mayco wants to replace an existing printer with a new high speed copier. The existing printer was purchased 10 years ago at a cost of $15,000. The printer is being depreciated using straight line basis assuming a useful life of 15 years and no salvage value. The new high-speed copier can be purchased for $ 24,000 (included freight and installation). It will reduce labor and raw material usage sufficiently to cut annual operating expense from $ 14,000 to $ 8,000. It is estimated the new copier can be sold for $ 4,000 at the end of five years. The old printer current market value is $ 2,000. If new printer is acquired the old printer will be sold to another company on its market value. The companys marginal tax rate is 40% and the replacement. Net working capital requirements will also increase by $ 3,000 at the time of replacement. The project cost of capital is 11.5% and new printer will be depreciated by WDV method 20%: Depreciation in year 1: $4,800, year2 : $3,840, year 3: $3,072, year 4: $2,458, year 5: $1,966. Compute Initial Investment outlay, operating cash flow over the projects life and the terminal year cash flows for Maycos replacement project. Then determine whether project should be accepted using NPV analysis.