Blue Spruce inc. wants to replace its current equipment with new high-tech equipment. The existing equipment was purchased 5 yean ago at a cost of $129,000. At that time, the equipment had an expected life of 10 years, with no expected saluage value. The equipinent is being depreciated on a straight-line basis. Currently, the market value of the old equipment is $40,100. The new equipment can be bought for $175,190, including installation. Over its 10-year life. it will reduce operating expenses from $192,800 to $145,500 for the first six ye $, , and from $200,500 to $194,100 for the last four years. Net working capital requirements will also increase by $21,000 at the time of replacement. It is estimated that the company can sell the new equipment for $24,500 at the end of its life. Since the new equipment's cash flams are relatively certain, the project's cost of capital is set at 10k, compared with 15% for an average-risk project. The firmis insvimian acceptable payback period is 5 years. Click here to view the factor table