One year? ago, your company purchased a machine used in manufacturing for $ 105,000 . You...

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One year? ago, your company purchased a machine used inmanufacturing for $ 105,000 . You have learned that a new machineis available that offers many? advantages; you can purchase it for$ 140,000 today. It will be depreciated on a? straigt-line basisover ten? years, after which it has no salvage value. You expectthat the new machine will contribute EBITDA? (earnings before?interest, taxes,? depreciation, and? amortization) of $60,000 peryear for the next ten years. The current machine is expected toproduce EBITDA of $ 23,000 per year. The current machine is beingdepreciated on a? straight-line basis over a useful life of 11?years, after which it will have no salvage? value, so depreciationexpense for the current machine is $ 9,545 per year. All otherexpenses of the two machines are identical. The market value todayof the current machine is $ 50,000 . Your? company's tax rate is40% ?, and the opportunity cost of capital for this type ofequipment is 12% . Is it profitable to replace the? year-oldmachine? THE NPV OF THE REPLACEMENT IS: __________________

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One year? ago, your company purchased a machine used inmanufacturing for $ 105,000 . You have learned that a new machineis available that offers many? advantages; you can purchase it for$ 140,000 today. It will be depreciated on a? straigt-line basisover ten? years, after which it has no salvage value. You expectthat the new machine will contribute EBITDA? (earnings before?interest, taxes,? depreciation, and? amortization) of $60,000 peryear for the next ten years. The current machine is expected toproduce EBITDA of $ 23,000 per year. The current machine is beingdepreciated on a? straight-line basis over a useful life of 11?years, after which it will have no salvage? value, so depreciationexpense for the current machine is $ 9,545 per year. All otherexpenses of the two machines are identical. The market value todayof the current machine is $ 50,000 . Your? company's tax rate is40% ?, and the opportunity cost of capital for this type ofequipment is 12% . Is it profitable to replace the? year-oldmachine? THE NPV OF THE REPLACEMENT IS: __________________