X Company is trying to decide whether to continue using old equipment to make Product A or replace it with new equipment that will have lower operating costs. The Following information is available: The new equipment will cost $50,000. Disposal value at the end of its 5-year useful life will be $6,000. The old equipment was purchased 3 years ago for $22,000. It can be sold immediately for $10,000 but will have zero disposal value in 5 years. Maintenance work, costing $3,000, will be necessary on the old equipment in Year 4. The new equipment will result in $10,000 of operating cost savings each year. Assuming discount rate of 7%, what is the net present value of replacing the old equipment with the new equipment? [Note: Use the Present Value tables in the Coursepack.] A: $1,818 B: $2,418 C: $3,216 D: $4,278 E: $5,689 F: $7,567 Submit Answer Tries 0/99