Question: The Homestretch Corporation has been using their current project system for 5 years and it originally cost $395,000. The system is being depreciated using the

The Homestretch Corporation has been using their current project system for 5 years and it originally cost $395,000. The system is being depreciated using the 7-year MACRS category. Homestretch can sell their current machine for $80,000 and they are considering replacing this network with a newer network that costs $565,000. The new machine will save $82,000 each year for the next eight years and is on the 7-year MACRS category as well. The Homestretch Corporation is in the 28% tax bracket and below you will find information that you can use to calculate their weighted average cost of capital. Answer the questions that follow

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