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The Ally Gator Corporation of Meadville, PA, make of Ally's electronic components, is considering replacing one of its current hand-operated assembly machines with a new

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The Ally Gator Corporation of Meadville, PA, make of Ally's electronic components, is considering replacing one of its current hand-operated assembly machines with a new fully automated machine. Existing situation: Original depreciable value of old machine-$70,000 Expected life-10 years Age-5 years old Expected salvage value in five years - So Current salvage value - $22,000 Marginal tax rate-34 percent Proposed situation: Fully automated machine resulting in annual savings of $38,000 Cost of machine - $86,000 Installation fee-$8,000 Expected life-five years, depreciated down to $0 Salvage value in 5 years - $30,000 What are the rele after-tax free cash flows? O $26,756 $27.092 Installation fee - $8,000 Expected life-five years, depreciated down to 50 Salvage value in 5 years - $30,000 What are the relevant after-tax free cash flows? O $26,756 O $27,092 O $29,0 O $29,772 V

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