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Assignment Asimet > Open Assignment PRINTER VERSION #RACE Problem 11.26 KMG Company currently sells 1.00 million units per year of a product to one customer at a price of $3.10 per unit. The customer requires that the product be dusive and expects no increase in sales during the five year contract. The company manufactures the product with a machine that it purchased seven years ago at a cost of $739.000 Currently, the machine has a book value of $147.000 but the market valus only $248,000. The machine is expected to last another five years, after which it will have no salvage value. Last year, the production variable costs per unit were as follow! Direct mail $2.90 Direct labour 0.90 Varde overhead 0.20 Total variable cost per unit 34.00 The company resident is considering replacing the old machine with a new one that would cost $814,000. The new machine is expected to last five years. At the end of that period, the salvar value it be $345.500. The president expect to save % of the company's total variable costs with the new machine Assume that the company's desired rate of return is 12%. Calculate the net present value of the investment. (at the net present value is megativn, use either a negativerse gronding theme .. 5 or protheses (45). For calculation purposes, se decimal places as duplayed in the factor table provided, c. 1.2513 and local answer to decal plane .275) Click here to my table Net present value Using the nut present value method, should the company replace the old machine with the new one? The president replace the equipment based on a et present value LINK TO THE Therefore CE