is considering either replacing one Interstate Manufacturing having the old machine overhauled. Information about the two alternatives follows. Management r 10% rate of return on its investments. Use the (PV of $1, FV of SI. PVA of $1, and FVA of S1) (Use appropriate factor(s) from the tables provided.) of its old machines with a new machine or equires a Alternative 1: Keep the old machine and have it overhauled. If the old machine is overhauled, it will be kept for another five years and then sold for its salvage value. Cost of old machine Cost of overhaul Annual expected revenues generated Annual cash operating costs a Salvage value of old machine in 5 years 5105,000 143,000 114,000 49,000 25,000 fter overhaul Alternative 2: Sell the old machine and buy a new one. The new machine is more efficient and will yield substantial operating cost savings with more product being produced and sold Cost of new machine Salvage value of old machine now Annual expected revenues genera Annual cash operating costs Salvage value of new machine in 5 years 5301,000 39,000 93,000 26,000 8,000 ted Required: Determi ine the net present value of alternative 1 Initial cash investment (net) hart values are based on Subsequent Cash inflow x Table factor Year Present Value (outflow)