- Trademill Co. is planning to replace its existing machinery with new and better technology ones with higher capacity. Old machinery bought 4 years ago, with a price of 900,000 , life of 10 years, zero salvage value, and can be sold in the market for 280,000 . New machinery has a total cost of 1,800,000, no salvage value and 6 years life. It is expected to increase sales by 1,200,000, CGS stays at its 40% level, and additional working capital of 380,000 required. Tax is 25%, discount rate 12%. Should the replacement be made? Use NPV for decision making. - LETS SOLVE TOGETHER