The management of HeliGrande, Inc. is considering the replacement of an old machine used in its helicopter repair facility. It is fully depreciated but it can be used by the corporation through 2015. If management decides to replace the old machine, PazCo Taxi Service has offered to purchase it for $60,000 on the replacement date. The old machine would have no salvage value in 2015. If the replacement occurs, a new machine would be acquired from Generous Industries on December 31, 2011. The purchase price of $1,000,000 for the new machine would be paid in cash at the time of replacement. Due to the increased efficiency of the new machine, estimated annual after-tax cash operating cost savings (including tax savings from depreciation) of $325,000 would be generated through 2015, the end of its expected useful life. The new machine is not expected to have any salvage value at the end of 2015. HeliGrande, Inc.