Question $4(1$ point$)$

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The Chang Company is considering the purchase of a new machine to replace an obsolete one. The machine being used for the operation has a book value and a market value of zero. However, the machine is in good working order and will last at least another $5$ years. The proposed replacement machine will perform the operation so much more efficiently that Chang's engineers estimate that it will produce after$-$tax cash flows $($labor savings and depreciation$)$ of $$12,500$ per year. The new machine will cost $$37,500$ delivered and installed, and its economic life is estimated to be $5$ years. It has zero salvage value. The firm's WACC is $10\mathrm{.}00\%,$ and its marginal tax rate is $40\%.$ Calculate the NPV of the replacement analysis?

$$9,885$

$$84,885$

$-$$$9,069$

$$28,431$

$$47,385$