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Business, 26.11.2019 05:31 aweller3898

Xcompany is considering replacing one of its machines in order to save operating costs. operating costs with the current machine are $64,000 per year; operating costs with the new machine are expected to be $50,000 per year. the new machine will cost $70,000 and will last for five years, at which time it can be sold for $3,000. the current machine will also last for five more years but will not be worth anything at that time. it cost $34,000 three years ago but is currently worth only $5,000. assuming a discount rate of 7%, what is the incremental net present value of replacing the current machine with the new machine?

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