You are considering replacing an old machine with a new machine. The new machine will generate savings of $50,000 per year, have a 5 year life and no salvage value. However the initial cost is $150,000 . The old machine had an initial cost of $100,000 with a life of 10 years, and an after tax salvage value of $10,000 at the end of its useful life. Annual depreciation of this machine is $9,000 and it was purchased 5 years ago and has a book value today of $55,000. Its current value is $65,000.

What is the NPV of the savings generated by the new equipment? Assume R = 10%