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What is the incremental net present value

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Question - X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $60,000 per year; operating costs with the new machine are expected to be $30,000 per year. The new machine will cost $49,000 and will last for six years, at which time it can be sold for $3,000. The current machine will also last for six more years but will not be worth anything at that time. It cost $30,000 three years ago but is currently worth only $8,000. Assuming a discount rate of 4%, what is the incremental net present value of buying the new machine instead of keeping the current machine?

Reference no: EM133069445

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