MNO is evaluating whether it should sell an existing five-year old boiler to buy a new one. It paid $25,000 for the old boiler which currently has a book value of $12,500 with another 5-year remaining life. It's sellable for $15,000 today. the price of the new boiler is $40,000. It has a life of five years and is depreciated to $20,000 book value, straight-line depreciation. with the new boiler, its revenue will rise $5,000 but the operating costs will be reduced by $3,000. New boiler can be sold at its book value at the end of five years. What is the NPV for this replacement decision. Assume 10 percent cost of capital and a 40 percent tax rate?

Group of answer choices

Switch to the new boiler because the replacement has a NPV of 6890K.

Switch to the new boiler because the replacement has a NPV of 2760

Switch to the new boiler because the replacement has a NPV of -3580

Keep the old boiler as the replacement has a NPV of -2760

Keep the old boiler as the replacement has a NPV of 3680

Next