QUESTION 16 St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, obsolete, and has no salvage value. However, even though it is obsolete, it is perfectly functional as originally designed and can be used for quite a while longer. A new welder will cost $182.500 and have an estimated life of years with no salvage value. The new welder will be much more efficient, however, and this enhanced efficiency will increase earnings before depreciation from $27,000 to $74.000 per year. The new machine will be depreciated over its 5-year MACRS recovery period, so the applicable depreciation rates are 20.00%, 32.00%, 19.20 11.52 11.52% and 5.76%. The applicable corporate tax rate is 25, and the firm's WACC IS 12. What is the after-tax earnings Increase when adding this new machine? (NOTE: To solve for this, you only need to complete one short step of this problem), $11.469 528.200 574,000 542.000 $35.250