- St Johns River Shipyards Is Considering The Replacement Of An 8 Year Old Riveting Machine With A New One That Will Incr 1 (20.94 KiB) Viewed 17 times
St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will incr
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St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will incr
St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will increase earnings before depreciation from $27,000 to $50,000 per year. The new machine will cost $85,000, and it will have an estimated life of 8 years and no salvage value. The new riveting machine is eligible for 100% bonus depreciation at the time of purchase. The applicable corporate tax rate is 25%, and the firm's WACC is 14%. The old machine has been fully depreciated and has no salvage value. What is the NPV of the project? Negative value, if any, should be indicated by a minus sign. Round your answer to the nearest cent. $ Should the old riveting machine be replaced by the new one? -Select-
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