Question: Question 2 20 pts Princess Products is considering replacing all its plastic injection molding machine with a new, more efficient one. The existing machine was
Question 2 20 pts Princess Products is considering replacing all its plastic injection molding machine with a new, more efficient one. The existing machine was purchased five years ago for $100,000 and was being depreciated straight-line to zero overs its ten-year life. It could currently be sold for $40,000, but would have no salvage value at the nd of its ten-year life. The new machine won't increase revenue, but will reduce expenses by $25,000 per year. It will cost $75,000 and have a useful life of five years. It will be depreciated straight-line to zero over its useful life. It will have no salvage value at the end of its life. The firm's tax rate is 30% and the required rate of return is 10%. What is the NPV of the equipment replacement? O $24,667.03 0 $56,254.18 O $40,024.95 O $23.456.78
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