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The Davten Toy Corporation currenty uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being deprecated on

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The Davten Toy Corporation currenty uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being deprecated on a straight-fine basis, ind it has 6 . years ol remaining Ife. Its current book value is $2,100, and it can be sold for $2,600 at this time. Thus, the annual deprecation expense is $2,100/6=$350 per yeac, If the old machine is not replaced, it can be sold for $500 at the end of its usefut life. Daites is offered a replaceinent machine which has a cost of $9,000, an etimated useful lfe of 6 years, snd an estimated salvage value of $900. The replacement machine as elig ble foe ios\% boms depreciation at the time of purchase. The replacement machine would permit an outpot expansion, so sales would rise by s8oo per vear; even so, the new muchine's much greater efficiency nould cause operating expenses to decline by $1,000 per vear. The new mactine would require that inventories be increased by $2,500, but accounts payable wbuld simutaneousir increins by 5500. Dauten's maginat federal-plas state tax rate is 25%, and ats wacc is 11%. What is the kiv of the noemental cash flow stream? Negative value, if any, shouls be indicated by a minus sign. Pocand your answer to the ncarest cent. 5 Showd the compery replece the da machine

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