Question $3(8$ points$)$:

Cardinal Corporation is considering the replacement of some machinery that has zero book value and a current market value of $$2,600.$ One possible alternative is to invest in new machinery that costs $$40,000.$ The new equipment has a four$-$year service life and an estimated salvage value of $$1,500,$ will produce annual cash operating savings of $$9,900,$ and will require a $$2,400$ overhaut in year $3.$ The company uses straight$-$line depreciation.

$\backslash$table$[[$Year$,$FV of $$1$ at $8\%,$FV of an ordinary annuity at $8\%,$PV of $$1$ at $8\%,$PV of an ordinary annuity at $8\%$