Precision Instruments uses a machine that was purchased at a cost of $$580,000$ three years ago. Its

current market value is $$340,000.$ An improved version of the machine is now available for

$$600,000.$ The firm has spent $$20,000$ on a study examining the feasibility of replacing the old

machine with the new machine and found that the new machine is capable of performing the same

functions as the old one. Both machines belong to CCA class $10($CCA rate $=30\%)$ and have an

expected remaining useful life of four years. While the older machine will be worth only $$60,000$

by that time, the new machine can be sold for $$250,000$ in four years. Management believes that

the company will have other class $10$ assets in four years, when the new machine is sold. The cost

of operating the old machine is expected to be $$100,000$ next year with this cost increasing at $4\%$

per year over the following three years. Management estimates that the cost of operating the new

machine will be $$50,000$ in its first year of operation and will increase at the same rate as the old

machine$$s operating cost. In addition, the more efficient new machine will immediately reduce the

required amount of net working capital $($NWC$)$ by $$30,000.$ The firm$$s marginal corporate tax rate

is $35\%$ and the required rate of return is $12\%.$ Should the firm replace the machine?