WCX Inc. is considering the replacement of its old stamping machine with a new one. The old machine was purchased 3 years ago for $62 000 and was expected to last for 8 years. The old machine has been depreciated using straight-line depreciation with an expected salvage value at the end of its life of $6 000. The new machine will cost $84 000 and would be considered a MACRS 3 year asset. The new machine would have a useful life of 5 years and then be sold for $8 000. The new stamping machine would result in increased revenues of $12 000 per year and would cost an additional $2 000 per year to operate. If you decide to purchase the new machine the old machine could be sold today for $40 000. The company has a 6% cost of capital and is in the 40% tax bracket. Its Cost Recovery Policy specifies 4 years as its payback requirement. Using payback period discounted payback period NPV IRR and MIRR determine if this is a good project or not.Problem Summarytype here Explain the steps involved in the Capital Budgeting process.Problem Analysistype here Post your Excel worksheet in the drop box with all your calculations and answers. Put an X in the box when this is complete
