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 increase
earnings before depreciation from $27,000 to $54,000 per year. The
new machine will cost $87,500, 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 16%.
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-YesNoItem 2