Question: What is the project incremental cash outflow at t = 0? Assume that replacement allows to sell the old machine. Purchase price of new machine

What is the project incremental cash outflow at t = 0? Assume that replacement allows to sell the old machine.

Purchase price of new machine                                   $10 000

Market value of old machine                                        1,000

Book value of old machine                                            2,000

Tax rate on profits                                                           35%

Decrease in net working capital requirement            2,000

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