The cash outlay for new equipment would be approximately $600,000. The net book value of the old equipment and its potential net selling price add up to $250,000. The total benefits over the life of the new equipment (measured in todays dollars) would be $900,000. The sum of benefits from the remaining life of the old equipment (measured in todays dollars) would be $300,000.
To Do
Create a spreadsheet to conduct a marginal costbenefit analysis for Monsanto Corporation, and determine the following:
a.	The marginal benefits of the proposed new equipment.
b.	The marginal costs of the proposed new equipment.
c.	The net benefit of the proposed new equipment.
d.	What would you recommend the firm do? Why?

	a.	The marginal benefits of the proposed new equipment.
	Benefits with the new equipment					$ 900,000
	Less: Benefits with the old equipment					$ 300,000
		Marginal (added) benefits of the New Equipment
	b.	The marginal costs of the proposed new equipment.
	Cost of new equipment					$ 600,000
	Less: Proceeds from the sale of the old equipment					$ 250,000
		Marginal (added) costs of the New Equipment
	c.	The net benefit of the proposed new equipment.
		Net benefit
	d.	What would you recommend the firm do? Why?
	Should Monsanto Corporation replace the old equipment with the new equipment?
	Why?
	Because the marginal benefits of $600,000 are					than the marginal costs of $350,000.