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Suppose you need to decide whether to keep a machine or replaceit with a new one:Old machine: The old machine can operate for 5years with operating cost of $120,000 per year.New machine: Replacing the old machine with anew one requires a capital cost of $250,000 in year zero (assumethat there is zero salvage value for old machine). The capital costis depreciable from year 0 to year 5 (over six years) based onMACRS 5-year life depreciation with the half year convention (tableA-1 at IRS). The new machine has a lower operating cost of $45,000per year for 5 years (from year 1 to year 5).Assume both machines produce similar good with similar valuethat yields similar revenue.Consider income tax of 35% and a discount rateof 10% annually. In present discounted valueterms, how much will you save by replacing the old machine with thenew machine?(Note: What you are being asked to do here is to conductincremental NPV analysis on the new machine versus the old machine,NPVnew machine - old machine.)