Calculate net present value

Exercise 2503 I Your answer is partially correct. Try again. Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased ve years ago at a price of $1.8 million; six months ago, Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $241,378. The new sewing machine would require a onetime, $85,000 training cost. Operating sts would decrease by the following amounts for years 1 to 7: Year 1 $390,000 2 400,500 3 410,200 4 425,000 5 433,600 6 434,500 7 436,900 The new sewing machine would be depreciated according to the decliningebalance method at a rate of 20%. The salvage value is expected to be $300,000. This new equipment would require maintenance costs of $96,200 at the end of the fth year. The cost of capital is 9%. Click here to View the factor table. Use the net present value method to determine the following: (1'! net present value is negative then enter with negative sign preceding the number e.g. 45 orparentheses e.g. (45). Round present value answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Calculate the net present value. Net present value $ Determine whether Hillsong should purchase the new machine to replace the existing machine? Click if you would like to Show Work for this question: Qpen Show Work