Replacement Analysis

for each year of its remaining life. As older flange$-$lippers are robust and useful machines, this one can be sold for $$20,000$ at the end of its useful life.

so the applicable depreciation rates are $33\mathrm{.}33\%,44\mathrm{.}45\%,14\mathrm{.}81\%,$ and $7\mathrm{.}41\%($There will be no depreciation in its $5$ th year since it will already be fully depreciated.$).$

The old machine can be sold today for $$35,000.$ The firm's tax rate is $25\%,$ and the appropriate cost of capital is $15\%.$

value.$)$ Round your answer to the nearest dollar. Cash outflow, if any, should be indicated by a minus sign.

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Should Everly replace the flange$-$lipper?