Question #2_(covered in Chapter 13) A farm owner is considering replacing his obsolete tractor with one of two new state-of-the- tractors. This new machine would cost $125,000 and would have a ten-year useful life. Unfortunately, the new machine would have no salvage value but would result in annual cost savings of $23,000 per year. The current old tractor can be sold now for $10,000. The farm owner's Cost of Capital is 10%. The farm owner uses the straight line method of depreciation (this depreciation information is needed only for calculating the Simple Rate of Return in Question #3). a.) Calculate the Net Present Value of replacing the tractor. b.) Based on this method of comparison, would you recommend replacing the tractor? Why? Question #3_(covered in Chapter 13) Based on the above information for Question #2 and your solution to that question, calculate the following associated with replacing the tractor: c.) The Profitability Index d.) The Payback Period e.) Simple Rate of Return