Sandhill Inc. manufactures snowsuits. Sandhill is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased 5 years ago at a price of $1.8 million; 6 months ago, Sandhill spent $55,000 to keep it operational. The existing sewing machine can be sold today for $242,003. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $389,700 2 400,800 3 410,800 4 425,700 5 433,000 6 434,600 7 437,000 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $380,100. This new equipment would require maintenance costs of $95,700 at the end of the fifth year. The cost of capital is 9%.