Question: please calculate it by steps Question 1: Consider the situation of Al-Badr Corporation, which must decide whether to replace an existing machine. Al-Badr currently pays
Question 1: Consider the situation of Al-Badr Corporation, which must decide whether to replace an existing machine. Al-Badr currently pays no taxes. The replacement machine costs 9000 O.R now and requires maintenance of 1000 O.R at the end of every year for eight years. At the end of eight year, the machine would be sold for 2000 O.R after taxes. The existing machine requires increasing amounts of maintenance each year, and its salvage value falls each year, as shown: Year Maintenance After-tax Salvage Present 0 4,000 1 1,000 2,500 2 2,000 1,500 3 3,000 1,000 4 4,000 0 The maintenance fee is paid at the end of each year. The machine will last for four more years before it falls apart. The salvage value will be zero at the end of year 4. If Al- Badr Corporation faces an opportunity cost of capital of 15 percent, when should it replace the machine? (5 points) Please provide your answer here
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