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 $48,000. Disposal value at the end of its 5-year useful life will be $6,000. The old equipment was purchased 3 years ago for $20,000. 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 3. The new equipment will result in $8,500 of operating cost savings each year. Assuming a discount rate of 5%, what is the net present value of replacing the old equipment with the new equipment? [Note: Use the Present Value tables in the Coursepack.] Submit Answer Tries 0/3