6. Taipei Company produces basketballs that it sells for $40 each. At capacity, Taipei can produce 60,000 units a year. The costs of producing and selling 60,000 units are as follows:Required:Suppose Taipei Company is currently producing and selling 50,000 basketballs. Tainan Company wants to place a one-time only special order for 8,000 basketballs at $25 each. Taipei Company will not incur variable marketing costs for this special order. Should Taipei Company accept this order? Please show your calculations. (15%)

4. ABC Company is interested in replacing a machine with a new one. The old machine has a salvage value of $20,000 now and no salvage value 3 years later, if rebuilt. If the old machine is kept, it must be rebuilt one year after at a predicted cost of $30,000. The new machine costs $120,000 and had a predicted salvage value of $25,000 at the end of three years. If purchased, the new machine will allow cash savings of $40,000 for the first year and $20,000 for each year of its remaining life. The cash savings all occur at the end of the respective year. Required: What is the net present value of purchasing the new machine if ABC Company has a required rate of return of 14%? (15%)

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