You are considering replacing a machine in your factory. The current machine cost $200,000 six years ago. It is being depreciated for tax purposes on a straight-line basis over its ten year life. The old machine can be sold today for $60,000 or be worthless in four years. The new machine would cost $350,000 and it would depreciate straight line to zero over four years. If the new machine is purchased, it would be operated for four years and then sold for $90,000. You are considering the new machine because it would result in labor savings of $170,000 per year. If you purchase the new machine, net working capital requirements will increase by $28,000 because of the need for additional spare parts. If your tax rate is 33% and your cost of capital is 11% per year, what is the net present value of purchasing the new machine, in thousands of dollars? 1) $169 thousand 2) $203 thousand 3) $98 thousand 4) $141 thousand 5) $118 thousand