Although the Chen Company's milling machine is old, it is stillin relatively good working order and would last for another 10years. It is inefficient compared to modern standards, though, andso the company is considering replacing it. The new millingmachine, at a cost of $112,000 delivered and installed, would alsolast for 10 years and would produce after-tax cash flows (laborsavings and depreciation tax savings) of $19,900 per year. It wouldhave zero salvage value at the end of its life. The project cost ofcapital is 10%, and its marginal tax rate is 25%.
Should Chen buy the new machine? Do not round intermediatecalculations. Round your answer to the nearest cent.
Negative value, if any, should be indicated by a minus sign.
NPV: $
Chen SHOULD orSHOULDN'T purchase the new machine.
