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 $52,000. Disposal value at the end of its 5-year useful life will be $7,000 The old equipment was purchased 3 years ago for $25,000. It can be sold immediately for $5,000 but will have zero disposal value in 5 years. Maintenance work, casting $3,500, will be necessary on the old equipment in Year 4. The new equipment will result in $9,000 of operating cost savings each year. Assuming a discount rate of 6%, 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 $-873B: $-1,091C -1,364 D 5-1,705 E: $-2,131 F $ 2,664 Submit Answer Tries 0/99