St. Johns river shipyards welding machine is 10 years old, fully depreciated and has no salvage value. However, even though it is old, it is still functional as originally designed and can be used for quite a while longer. St. Johns river shipyards is considering replacing the old welder with a new welder. This new welder will cost $200,000 and have an estimated life of 8 years with no salvage value. The new welder will be much more efficient however, and this enhanced efficiency will increase earnings before depreciation by $55,000 per year. This new machine will be depreciated over a 5 year life using straight line depreciation. The applicable corporate tax is 40%, and the project cost of capital is 10%. Find the NPV and determine whether the old welder should be replaced by the new one.

A. NPV is $154,073.53 and old welder should be replaced

B. NPV is $127,684.04 and old welder should be replaced

C. NPV is $36,705.15 and old welder should be replaced

D. NPV is -$23,947.44 and old welder should not be replaced

E. NPV is $93,420.94 and old welder should be replaced