(Time allowance: 12 minutes) This is a replace now or later problem; however, the question asked is only about one part of the analysis. Do not solve the entire problem, only the part asked below. You are facing a decision of whether to replace an old equipment at your factory. If the new equipment is purchased the old equipment can be sold today for $10. However, if the old equipment is not replaced today, it will continue to be depreciated down to zero using straight-line method over its remaining 4 years. The remaining book value today of the old equipment is $7. It is estimated that the old equipment can be sold for $1 in one year (at the end year 1). The pre-tax maintenance cost (expenses) per year for the old equipment will be $8. Assume that the discount rate is 12% and the tax rate is 40%. For your answer, round to nearest dollar and do not use the dollar ($) sign; do not enter decimals. For example if your answer is -$12 534 then enter -13; if answer is $23.7459 then enter 24, if the answer is $40 then enter -40 The NPV (at the end of year 1) for the replace l-year later decision is Your Answer: (Time allowance: 12 minutes) This is a replace now or later problem; however, the question asked is only about one part of the analysis. Do not solve the entire problem, only the part asked below. You are facing a decision of whether to replace an old equipment at your factory. If the new equipment is purchased the old equipment can be sold today for $10. However, if the old equipment is not replaced today, it will continue to be depreciated down to zero using straight-line method over its remaining 4 years. The remaining book value today of the old equipment is $7. It is estimated that the old equipment can be sold for $1 in one year (at the end year 1). The pre-tax maintenance cost (expenses) per year for the old equipment will be $8. Assume that the discount rate is 12% and the tax rate is 40%. For your answer, round to nearest dollar and do not use the dollar ($) sign; do not enter decimals. For example if your answer is -$12 534 then enter -13; if answer is $23.7459 then enter 24, if the answer is $40 then enter -40 The NPV (at the end of year 1) for the replace l-year later decision is Your