Question: Alternative 2 : Sell the old machine for $ 4 5 , 0 0 0 and buy a new one. The new machine requires an

Alternative 2: Sell the old machine for $45,000 and buy a new one. The new machine requires an initial investment of $297,000 and can be sold for a $12,000 salvage value in five years. It would yield cost savings and higher sales, resulting in net cash flows of $50,000 in each of the next five years.
Required:
Determine the net present value of alternative 1.
Determine the net present value of alternative 2.
Which alternative should management select based on net present value?

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