The Modi Tool Company is considering the purchase of a new press to replace the one currently being used. The present machine is expected to last 7 years and have no salvage value. The press in current use has a book value of BD 7,000 and can be sold today for BD 4,000. The new press will cost BD 14,000 and is expected to last 7 years. The new machine will Increase the gross margin from BD 15,000 to BD 20,000 per year and the maintenance cost will decrease from BD 3,000 to BD 1,500 per year. The new press will require additional investment of BD 3,000 in accounts receivables and BD 5,000 in inventories, which are partly financed by an increase in short term liabilities of BD 3,000. Modi depreciates its assets on a straight-line basis, and pays taxes at a rate of 40%. The Modi Tool Company is considering the purchase of a new press to replace the one currently being used. The present machine is expected to last 7 years and have no salvage value. The press in current use has a book value of BD 7,000 and can be sold today for BD 4,000. The new press will cost BD 14,000 and is expected to last 7 years. The new machine will Increase the gross margin from BD 15,000 to BD 20,000 per year and the maintenance cost will decrease from BD 3,000 to BD 1,500 per year. The new press will require additional investment of BD 3,000 in accounts receivables and BD 5,000 in inventories, which are partly financed by an increase in short term liabilities of BD 3,000. Modi depreciates its assets on a straight-line basis, and pays taxes at a rate of 40%