17) Allen College has a telephone system that is in poor condition. The system can be either overhauled or replaced with a new system. The following data have been gathered concerning these two alternatives:

	Present System	Proposed New System
Purchase cost when new	$100,000	$140,000
Accumulated depreciation	$90,000	-
Overhaul cost needed now	$80,000	-
Annual cash operating costs	$30,000	$20,000
Salvage value now	$10,000	-
Salvage value in 8 years	$2,000	$15,000
Working capital required	-	$50,000

Allen College uses a 12% discount rate and the total cost approach to net present value analysis. Both alternatives are expected to have a useful life of eight years.

Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. The net present value of the alternative of replacing the present system with the proposed new system is closest to: rev: 01_27_2016_QC_CS-39173, 11_10_2016_QC_CS-69517

A) ($283,300)

B) ($233,300)

C) ($263,100)

D) ($273,100)