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replace the old freezer ut the two alternatives fol- 4B present Archer Foods has a freezer that is in need of repair and is considering whether to replace the la with a new freezer or have the old freezer extensively repaired. Information about the two altero lows. Management requires a 10% rate of return on its investments. Alternative 1: Keep the old freezer and have it repaired. If the old freezer is repaired, it will be kon another eight years and then sold for its salvage value. Cost of old freezer ...... Cost of repair ............ Annual expected revenues generated ............... Annual cash operating costs after repair ............ Salvage value of old freezer in 8 years............ $75,000 50,000 63,000 55,000 3,000 Alternative 2: Sell the old freezer and buy a new one. The new freezer is larger than the old one and will allow the company to expand its product offerings, thereby generating more revenues. Also, it is more energy efficient and will yield substantial operating cost savings. Cost of new freezer ............................. Salvage value of old freezer now.. Annual expected revenues generated .............. Annual cash operating costs. Salvage value of new freezer in 8 years............. $150,000 5,000 68,000 30,000 8,000 resent value 5,921) Required 1. Determine the net present value of alternative 1. 2. Determine the net present value of alternative 2. 3. Which alternative do you recommend that management select? Explain