it: Chapter 12 - EOC Queations (CHOW) Antigament Score: 44.74% Save Submit Assignment for Grading Problem 12.10 (Replacement Analysis) Question 3 of 10 Check My Work (2. remaining) eBook The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being depreciated on a straight-line basis, and it has 6 years of remaining life. Its current book value is $2,400, and it can be sold for $2,600 at this time. Thus, the annual depreciation expense is $2,400/6 $400 per year. If the old machine is not replaced, it can be sold for $500 at the end of its useful life. Dauten is offered a replacement machine which has a cost of $10,000, an estimated useful life of 6 years, and an estimated salvage value of $800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase. The replacement machine would permit an output expansion sa sales would rise by $1,000 per year even So, the new machine's much greater efficiency would cause operating expenses to decline by $1,000 per year. The new machine would require that inventories be increased by $2,500, but accounts payable would simultaneously increase by $500. Dauten's marginal federal-plus-state tax rate is 25%, and its WACC IS 114 What is the NPV of the incremental cash flow stream? Negative value, any, should be indicated by a minus sign Round your answer to the nearest cent. Should the company replace the old machine Yes Check My Work (2 remaining Problem 12.10 Replacement Analysis) Question of 10 Sam Submit Assignment for Grading MacBo