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8. Problem 12.10 (Replacement Analyais) The Diuten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legisiation. This machine is being depreciated on a stralgheline basis, and it has 6 years of remaining life. Its current book value is $2,100, and it can be sold for $2,500 at this time. Thus, the anrual depreciation expense is $2,100/5= $350 per year, if the old machine is not replaced, it can be sold for $500 at the end of its useful life. Dauten is offiered 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 depredation at the time of purchase. The replacement machine would permit an output expansion, se sales would rise by 11,000 per yearf even so, the new machine's much greater efficiency would cause operating expenses to decline by 51,000 per year. The new machine would require that inventories be increased by \$2,500, but accounts payable would simultaneously increase by 5800 . Dauten's marginal federal-plus-5tate tax rate is 25%6, and its wacc is 11%. What is the NPV of the incremental cash flow stream? Negative value, if any, should be indicated by a minus sign. Round your answer to the nearest cent. $ Should the company replace the old machine? 8. Problem 12.10 (Replacement Analyais) The Diuten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legisiation. This machine is being depreciated on a stralgheline basis, and it has 6 years of remaining life. Its current book value is $2,100, and it can be sold for $2,500 at this time. Thus, the anrual depreciation expense is $2,100/5= $350 per year, if the old machine is not replaced, it can be sold for $500 at the end of its useful life. Dauten is offiered 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 depredation at the time of purchase. The replacement machine would permit an output expansion, se sales would rise by 11,000 per yearf even so, the new machine's much greater efficiency would cause operating expenses to decline by 51,000 per year. The new machine would require that inventories be increased by \$2,500, but accounts payable would simultaneously increase by 5800 . Dauten's marginal federal-plus-5tate tax rate is 25%6, and its wacc is 11%. What is the NPV of the incremental cash flow stream? Negative value, if any, should be indicated by a minus sign. Round your answer to the nearest cent. $ Should the company replace the old machine