Attempt Koop the Highest 10 4. Problem 12.04 (Replacement Analysis) A-Z Book The Oviedo Company is considering the purchase of a new machine to replace an obsolete one. The machine being used for the operation has a book value and market value of zero. However, the machine is in good working order and will last at least another 10 years. The proposed replacement machine will perform the operation so much more efficiently that Oviedo's engineers estimate that it will produce after-tax cash flown (labor savings) of $8,000 per year. The after-tax cost of the new machine is $50,000, and its economice is estimated to be 10 years. It has zero salvage valor. The firm's WACC s 10%, and its marginal tax rate is 25% Should Oviedo buy the new machine Oviedo purchase the new machine Grade it Now Save & Continue & Continue without saving