Sandhill Partners is evaluating the replacement of an older machine with either the new SuperPlus or MaxPlus machine. The market value of the original machine is $$10,000$ but it has an expected salvage value of $$1,000$ in $5$ years. The details regarding the two new machines are as follows:

Machine Cost Useful Life Salvage Value Reduced Annual Pretax

Operating Cash Flows

SuperPlus $$25,0005$ years $$2,000$ $$5,800$

MaxPlus $$38,0005$ years $$3,100$ $$6,000$

The company's tax rate is $40\%$ and the machines are Class $10$ assets with a $30\%$ CCA rate. The company's required return is $13\%.$

Estimate the NPV of replacement. $($Enter negative amounts using either a negative sign preceding the number e g$.-45$ or parentheses e$.$g$.(45).$ Round intermediate and final answers to $0$ decimal places, e$.$g$.,2,345.)$

NPV of SuperPLUS $ $($ENTER AMOUNT$)$

NPV of MaxPLUS $ $($ENTER AMOUNT$)$

Recommend the machine that Sandhill Partners should purchase.

machine.

Sandhill Partners should purchase the $($WHICH ONE SUPERPLUS OR MAXPLUS$)$