Question 12 (8 points) Corporation is using a machine that originally cost $80,000. The machine is being depreciated by the straight- The Taylor line method over eight years ($10,000 per year) and has four years of depreciation remaining. The machine has a book value of $40,000 and a current market value of $31,500. Jacqueline Elliot, the Chief Financial Officer of Taylor, is considering replacing this machine with a newer model costing $73,000. The new machine will save $5,000 in after-tax earnings each year for the next sik years. The new machine is in the 5-year MACRS category. Taylor Corporation is in the 34% tax bracket and has a 10% cost of capital. Calculate the net cost of the new machine after deducting the cash inflow from the sale of the old machine. O 1) $39,950 O 2) $37,406 O 3) $38,610 4) $36,640 Save