F2 Industries is considering the replacement of its old, fully depreciated dozer. Two upgraded used models under consideration. The Komatsu D39-22 with a cost of $190,000 with and an expected remaining life of 3 years. The D39-22 will provide after tax cash flows (labor savings and depreciation) of $87,000 per year. The second dozer is a Case D-9 which costs $360,000 has a remaining life of 6 years and will produce after tax cash flows of $98,300 per year. Because of the current economic conditions surrounding construction dozers are not expected to rise over the life of the project. Assume F2 Industries cost of capital is 14%. The question is; should the firm replace its current dozer which is fully depreciated but still operational. If so which dozer should be purchased? By how much would the value of the firm be increased with a purchase of a more modern dozer? Lastly what is the equivalent annual annuity for each machine?