Maryland Boxmakers is considering replacing an 10 year oldriveting machine with

Maryland Boxmakers is considering replacing an 10 year oldriveting machine with a new one that will increase earnings beforedepreciation from $30000 to $50000 per year. The new machine willcost $75500 and it will have an estimated life of 8 years and nosalvage value. The new machine will be depreciated over its 5 yearMACRS recovery period; so the applicable depreciation rates are20% 32% 19% 12% 11% and 6%. The applicable corporate tax rateis 40% and the firms WACC is 14%. The old machine has been fullydepreciated and has no salvage value. Should the old rivetingmachine be replaced by the new one? Explain your answer.