Dauten is offered a replacement machine that has a cost of $8,000,an estimated useful life of 6 years, ad an estimated savage value of $ 800.
This machine falls into the MACRS 5-year class;so the applicable depreciation rates are 20%,32%,19%,12%,11% and 6%.
The replacement machine woud permit an output expansion,so sales would rise by $1,000per year.