QUESTION 7 Use the following information to answer the next seven questions: Axelrod Corp. is considering replacing an old machine with a new one that costs $1.460.000 plus $100.000 for shipping and installation. The new machine will be depreciated on a straight line basis for an estimated life of 13 years although it will be used for only ten years. It will require 590,000 in Initial networking capital. The NWC maintains its level of 90,000 in years 1 through 8. The NWC will decrease to $48.000 by the end of year nine, then fully recovered by the end of year ten. The old machine is fully depreciated but is expected be sold for 580,000 of the new machine is purchased. The old machine is currently generating $150,000 per year of EBIT and, if not replaced, is expected to keep generating the same EBIT for the next ten years. The new machine is expected to generate $120,000 in EBIT per year for 10 years. At the end of year ten it will be sold for $430,000. The applicable tax rate is 40 The total net initial investment is $1,621,200 $1,650,000 $1,702,000 $1.602.000 All mouers