(Incremental cash flows and NPV) The Canton Sundae Corporation is considering the replacement of an existing machine

B2. (Incremental cash flows and NPV) The Canton Sundae Corporation is considering the replacement of an existing machine. The new machine, called an X-tender, would provide better sundaes, but it costs $120,000. The X-tender requires $20,000 in setup costs that are expensed immediately and $20,000 in additional working capital. The X-tender’s useful life is 10 years, after which it can be sold for a salvage value of $40,000. Canton uses straight-line depreciation, and the machine will be depreciated to a book value of zero on a six-year basis. Canton has a tax rate of 45% and a 16% cost of capital on projects like this one. The X-tender is expected to increase revenues minus expenses by $35,000 per year. What is the NPV of buying the X-tender?”