Question: Could you please help me with this task??? Thank you :) 3. Suppose Company Inc. wants to replace an existing printer with a new high-speed

Could you please help me with this task??? Thank you :)

Could you please help me with this task??? Thank you :) 3.

3. Suppose Company Inc. wants to replace an existing printer with a new high-speed copier. The existing printer was purchased 10 years ago at a cost of $15,000. The printer is being depreciated using straight line basis assuming a useful life of 15 years and no salvage value (i.e., its annual depreciation is $1,000). If the existing printer is not replaced, it will have zero market value at the end of its useful life. If the company decides to replace the existing printer, it would be possible to sell it now for $3 000. The new high-speed copier can be purchased for $25,000. Over its 5-year life, it will reduce labour and raw materials usage sufficiently to cut annual cash operating costs from $15,000 to $7,000 (NB! excluding change in depreciation). The accounting salvage value of a new machine is 0 but the estimated market value is still 10% of the purchase price. The company's tax rate is 40%. Net working capital requirements will also increase by $3,000 at the time of replacement. The project's cost of capital is 8%. Questions: a) Compute the initial outlay, operating cash flow over the project's life, and the terminal- year cash flows for Company Inc. replacement project. b) Determine whether the project should be accepted using NPV analysis

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