Your company is considering the replacement of a current piece of machinery, which is expected to be more efficient and increase the firm's revenues on an incremental basis. The company has collected the following information about the proposed replacement. 1. The new machine has an anticipated economic life of 5 years. 2. The cost of this new machine will be $125,000 and the firm will incur additional freight and installation costs of $15.000, giving the machine a depreciable basis of $140,000. 3. The new machine will be depreciated over 4 years, straight-line. The firm expects that it will be able to sell this new machine for $30,000 at the end of the project's life (Year 5), even though it will have been depreciated down to a book value of zero (a capital gain of $30,000). 4. The old machine was bought 4 years ago for a price of $120,000. It has been depreciated on a straight-line basis using a 6-year life ($20,000 per year). The firm believes that it can sell the old machine for $50,000 today, even though its book value is $40,000 (a capital gain of $10,000). 5. The firm will be required to make an incremental investment in net operating working capital of $20,000 in Year O, which they expect to recapture at the end of the project's life in Year 5. 6. Projected incremental revenues to be produced by the new machine are Year 1 - $50,000; Year 2 - $80,000: Year 3 - $60.000; Year 4 - $50,000; Year 5 - $50,000. 7. Incremental operating costs will equal to 35 percent of the revenue in each year. 8. The firm's tax rate is 40 percent. 9. The cash flows of the project should be discounted at 11 percent. What is the net present value (NPV) for this project? O $18.961 $22.703 O $30,688 $26,609 $15.374