Snap-off Ltd is one of Australia's leading manufacturers of tools for the automotive industry. The company is considering whether it should replace an old steel press and has provided the following information. The old press was bought 3-years ago for $120,000 and has been depreciated by $8.000 a year on a straight line (prime cost basis for tax purposes. The old press has a salvage value of $60,000 If it was sold today and so salvage value if it was sold at the end of its normal useful life. The new press costs $240.000, has a useful life of 12 years and will be deprecated on a straight-line basis for tax purposes. In terms of annual cash flows the new press will generate additional cash revenues of $50,000 per year and additional cash expenses of $25,000 per year. Finally, the new press will have a salvage value of $20,000 at the end of its 12 year life and will not be replaced. Snap Off pays 30% tax in the year income is earned and uses a 11% p.a. discount rate for project evaluation (a) If calculated in its marginal form (8 - A), what does the net present value (NPV) of this project indicate? (2 marks) (b) Using the above information, prepare a detailed discounted cash flow analysis relevant to management's decision. With your analysis, you must include advice on whether the company should replace the press. (9 marks)