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The following information is from the projected income statement for the New World Inc. for the next 5 years (it is the same every year):
The following information is from the projected income statement for the New World Inc. for the next 5 years (it is the same every year): Annual numbers Revenues $100,000 Operating Expenses -$50,000 EBITDA $50,000 Depreciation -30,000 EBIT 20,000 Net Income 12,000 To improve its performance, the firm is considering replacing one of its old machines. The replacement will not affect revenues, but the company's operating expenses would be reduced by 10%. The old machine was purchased three years ago for $42,000. At that time, it was estimated to have an eight-year life and it was to be depreciated on a straight-line basis to a book value of $2,000 (and it is expected that this would be its sale price at the end of its original life if the company continues to use it). The old machine, if sold now (i.e., today) has a sale price of $27,241. The new machine costs $35,840. It has a five-year economic life and it will be fully depreciated to a book value of zero over this period. It also will have no sale price and hence zero expected salvage value. The firm's tax rate is 34%. The discount rate is 12%. What is the NPV of this replacement decision (rounded to the nearest dollar)? Please input without the $ sign or leading commas
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