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Original purchasing price $550,000.00 original life 10 years, remaining life 5years, straight line depreciation in use , salvage value $ 50,000.00,...

Original purchasing price $550,000.00 original life 10 years, remaining life 5years, straight line depreciation in use , salvage value $ 50,000.00, current fair market value $ 260,000.00

information new machine A

Purchasing price $895,000.00

Estimated life 5 Year

Use straight line depreciation method

Estimated salvage value $10,000.00


Estimated Net operating cash flow increase / decreases Prior to depreciation and taxes


End of of Year 1 $ 100,000.00

Year 2 $ 150,000.00

Year 3 $250,000.00

Year 4 $ 200,000.00

Year 5 $200,000.00

Assumption

Tax rate

WACC rate

If you keep the old machine, the NPV is

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