The Cornchopper Company is considering the purchase of a new harvester.

• The new harvester is not expected to affect revenue, but operating expenses will be reduced by $13,200 per year for 10 years.

• The old harvester is now 5 years old, with 10 years of its scheduled life remaining. It was originally purchased for $68,000 and has been depreciated by the straight-line method.

• The old harvester can be sold for $21,200 today.

• The new harvester will be depreciated by the straight-line method over its 10-year life.

• The corporate tax rate is 22 percent.

• The firms required rate of return is 13 percent.

• The initial investment, the proceeds from selling the old harvester, and any resulting tax effects occur immediately.

• All other cash flows occur at year-end.

• The market value of each harvester at the end of its economic life is zero.