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Station WJXT is considering the replacement of its old, fully depreciated sound mixer. Two new models are available. Mixer X costs $216,000, has a five-year

Station WJXT is considering the replacement of its old, fully depreciated sound mixer. Two new models are available. Mixer X costs $216,000, has a five-year expected life, and will generate after-tax cash flow savings of $68,200 per year. Mixer Y costs $345,000, has a ten-year expected life, and generates after-tax cash flow savings of $83,400 per year.

The cost of capital is 10 percent. Should WJXT replace the old mixer with mixer X or Y?

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