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10-14 Otter Outside Gear must decide whether to replace a 10year old packing machine with a new one that costs. $142,600.Replacing the old machine will increase net operating income(excluding depreciation) from $75,000 to $105,000. It will decreaseNWC by $16,000. The new machine falls in the MACRS 5-year class. Ifthe new machine is purchased, it will be sold in six years for$20,000; whereas, if the old machine is kept, it will have nosalvage value in six years. The old machine has a current marketvalue of $7,260, and although its current book value is $6000, inone year the old machine's book value will be zero. The firm'smarginal tax rate is 35%, and its required rate of return is 10%.Should the new packing machine be purchased? Use NPV, IRR and MIRRto make your decision.