Q Search this cours 12- EOC Questions (CNOW) ignment: Chapter 12 - EOC Questions (CNOW) Assignment Score: 10.00% Save Submit Assignment for Grading estions Problem 12.10 (Replacement Analysis) Question 6 of 10 Check My Work (2 remaining) Book The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being depreciated on a straight-line basis, and it has 6 years of remaining life. Its current book value is $2,400, and it can be sold for $2,600 at this time. Thus, the annual depreciation expense is $2,400/6 = $400 per year. If the old machine is not replaced, it can be sold for $500 at the end of its useful life. Dauten is offered a replacement machine which has a cost of $10,000, an estimated useful life of 6 years, and an estimated salvage value of $100. The replacement machine is eligible for 100% bonus depreciation at the time of purchase. The replacement machine would permit an output expansion, so sales would rise by $1.000 per year, even so, the new machine's much greater efficiency would cause operating expenses to decline by $1,500 per year. The new machine would require that inventories be increased by $2,000, but accounts payable would simultaneously increase by $500. Dauten's marginal federal-plus-state tax rate is 25%, and its WACCS 1196. What is the NPV of the incremental cash flow stream? Negative value, if any, should be indicated by a minus sign. Round your answer to the nearest cent. $ Should the company replace the old machine? -Select- Check My Work (2 remaining) 0 Toon Rey Problem 12.10 (Replacement Analysis) Question of 10 Submit Assignment for Grading Save