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The WuShock Company is considering the purchase of a new machine to replace an obsolete...

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The WuShock Company is considering the purchase of a new machine to replace an obsolete one. The machine being used for the operation has a book value and a market value of zero. However, the machine is in good working order and will last at least another 5 years. The proposed replacement machine will perform the operation so much more efficiently that WuShock's engineers estimate that it will produce an increase in aftertax cash flows (labor savings and depreciation) of $6000 per year, and will not have an effect on net working capital. The new machine will cost $22,500 delivered and installed, and its economic and depreciation life is estimated to be 5 years. It has zero salvage value. The firm's WACC is 8%, and its marginal tax rate is 15% What is the NPV of this replacement project? Round your answer to full dollars. a. $23,956 b. $2,317 C. $1,456 d. $20,363

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