Question 32 Vaughn Inc. manufactures snowsuits. Vaughn is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Vaughn spent $55,000 to keep it operational. The existing sewing machine can be sold today for $242,003. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 2 3 4 $389,700 400,800 410,800 425,700 433,000 434,600 437,000 5 6 7 The new sewing machine would be depreciated according to the declining- balance method at a rate of 20%. The salvage value is expected to be $380,100. This new equipment would require maintenance costs of $95,700 at the end of the fifth year. The cost of capital is 9%. Click here to view PV table. Use the net present value method to determine the following: (If net present value is negative then enter with negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round present value answer to O 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 Calculate the net present value. Net present value Determine whether Vaughn should purchase the new machine to replace the existing machine? Click if you would like to Show Work for this question: Open Show Work