Please help me answer the following practice question. If possible, use Excel. :)

Chapter 12 The Capital Budgeting Decision Assume the old and new equipment would provide the following operating gains (or losses) over the next six years: Year 1 2 3 O w N- New Equipment $80,000 76,000 70,000 60.000 50.000 45,000 Old Equipment $25,000 16.000 9,000 8,000 6.000 (7.000) 4 5 6 The firm has a 25 percent tax rate and a 9 percent cost of capital. Should the new equipment be purchased to replace the old equipment? WEB EXERC HENSIVE PROBLEM The Woodruff Corporation purchased a piece of equipment three years ago for $230,000. It has an asset depreciation range (ADR) midpoint of eight years. The old equipment can be sold for $90,000. A new piece of equipment can be purchased for $320,000. It also has an ADR of eight years. Chapter 12 The Capital Budgeting Decision Assume the old and new equipment would provide the following operating gains (or losses) over the next six years: Year 1 2 3 O w N- New Equipment $80,000 76,000 70,000 60.000 50.000 45,000 Old Equipment $25,000 16.000 9,000 8,000 6.000 (7.000) 4 5 6 The firm has a 25 percent tax rate and a 9 percent cost of capital. Should the new equipment be purchased to replace the old equipment? WEB EXERC HENSIVE PROBLEM The Woodruff Corporation purchased a piece of equipment three years ago for $230,000. It has an asset depreciation range (ADR) midpoint of eight years. The old equipment can be sold for $90,000. A new piece of equipment can be purchased for $320,000. It also has an ADR of eight years