FIGURE 1 Orion Industries is using a machine whose original cost was $30,000. The machine is now five years old and has a current market value of $6,000. The machine is being depreciated over life toward an estimated salvage value of $2,000. Its market value will also be $2,000 at that time, that is, five years from today. Management is contemplating the purchase of a new machine whose cost is $60,000 and whose estimated salvage value is $5,000. An additional $7,000 investment in net working capital will be required at the time the new machine is purchased. Expected savings from the new machine are $10,000 per year, and it will raise sales by $8,000 per year. Depreciation is on a straight-line basis over a 5-year life. The market value of the new machine is expected to be $15,000 in five years. Orion's cost of capital is 10%. Assume a 40% tax rate