ABC Corp is considering an asset replacement decision. The existing machine: was bought 2 years ago for $60,000 economic life was 5 years when it was bought tax allowable depreciation is $12,000 p.a. for 5 years . current market value of machine = $40,000 expected salvage value of machine in 3 years time is $4,000 The new machine: . . would cost $80,000 (including purchase cost, shipping cost and installation cost) economic life is 3 years tax allowable depreciation is $27,000 p.a. for 2 years . expected salvage value in 3 years time is $5,000 . Deciding to buy the new machine will: use the working capital of $5,000 Additional details: Before tax net operating cashflow old machine: $112,000 p.a. for 3 years new machine: $123,500 p.a. for 3 years Corporate tax rate = 30% Assumed discount rate = 7% p.a. Based on the assumed discount rate, what is the value of using the new machine to replace the old machine?