Inferstate Manufocturing is considering either overtauling an old machine or replacing isith s new machine, Information about the two a ternatives follows. Manogement requires a $10$ S rase of return on its investments. $($PV $"$$$1.$ PV of $$1,$ PVA of $$1,$ and FVA of $$1)$ Note: Use appropriate factor$($s$)$ from the tables provided.

Alernathe fikep the old machine and have it overhauled. This requires an initial investment of $$148,000$ and results in $$59,000$ of net cash flows in each of the next flve years. Aher five years, it can be sold for a $$23\mathrm{.}000$ salvage value.

Alternative $2$: Sell the old machine for $$38,000$ and buy a new one. The new machine requires an inkel investmer :c $$330/900$ and Can be soid for a $$11000$ salvage value in flive years. It would yeld coat savings and higher sales, resulting in net cash flows of $$54,000$ in each of the neat five years.

Required:

Determine the net present walue of alternative $1.$

Determine the net present value of alternative $2.$

Which alternative should management select based on net present value?

Cemplete this question by entering yeur anawers in the tabs below.

Required $1$

OUREminet he net present value of alternative $1.$

Note: Do not round intermediate calculations, llound your presest value factor to $4$ decimalr and final andeers to the seareat whele dollar.

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