Question: Pilot Plus Pens is deciding when to replace its old machine. The machine's current salvage value is $ 3 , 0 0 0 , 0

Pilot Plus Pens is deciding when to replace its old machine. The machine's current salvage value is $3,000,000. Its current book value is $1,775,000. If not sold, the old machine will require maintenance costs of $705,000 at the end of the year for the next five years. Depreciation on the old machine is $355,000 per year. At the end of five years, it will have a salvage value of $150,000 and a book value of $0. A replacement machine costs $4,600,000 now and requires maintenance costs of $375,000 at the end of each year during its economic life of five years. At the end of the five years, the new machine will have a salvage value of $740,000. It will be fully depreciated by the straight-line method. In five years, a replacement machine will cost $3,600,000. The company will need to purchase this machine regardless of what choice it makes today. The corporate tax rate is 24 percent and the appropriate discount rate is 8 percent. The company is assumed to earn sufficient revenues to generate tax shields from depreciation. Calculate the NPV for the new and old machines.
Note: Do not round intermediate calculations and enter your answers in dollars, not millions, rounded to 2 decimal places, e.g.,1,234,567.89.
\table[[Old machine,],[New machine,]]
Pilot Plus Pens is deciding when to replace its

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