2. MTE mechanical engineering Company has a machine purchased 5 years ago at a cost of Tk. 100000.00. The machine had an expected duration of 10 years at that time. It had no salvage value and was depreciated on a straight line method. Therefore, its annual depreciation charge was Tk. 10000.00 and its present book value is Tk. 30000.00. The financial manager of the company is thinking to purchase a new machine costing Tk. 150000.00 including freight and installation charges. The duration life of the new machine is 5 years with salvage value of Tk.25000.00. The new machine will save Tk. 40000.00 per year. If the new machine is purchased, the old one can be sold for Tk. 15000.00. The corporate tax rate is 40% and cost of capital is 12%. Purchasing of new machine would require Tk. 15000.00 as working capital in the beginning of the year which could be realized at the end of the 5th years. The new machine will be depreciated on straight line basis. Using the NPV method determined should the old be replaced? 10