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The Dauten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legislation . This machine is being depreciated

The Dauten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legislation . This machine is being depreciated on a straight - line basis , and it has 6 years of remaining life . Its current book value is $ 2,100, and it can be sold for $ "2600"0 at this time . Thus , the annual depreciation expense is $ 2,100/6 $ 350 per year . If the old machine is not replaced , it can be sold for $ 500 at the end of its useful life . Dauten is offered a replacement machine which has a cost of $ 10,000, an estimated useful life of 6 years , and an estimated salvage value of $ 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase . The replacement machine would permit an output expansion , so sales would rise by $ 1,000 per year ; even so , the new machine's much greater efficiency would cause operating expenses to decline by $ 1,000 per year . The new machine would require that inventories be increased by $ 2,500, but accounts payable would simultaneously increase by $ 500. Dauten's marginal federal - plus - state tax rate is 25%, and its WACC is 11%. What is the NPV of the incremental cash flow stream ? Negative value , if any , should be indicated by a minus sign . Round your answer to the nearest cent . $Should the company replace the old machine ?-Select-

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