3 Problem 24-6A (Algo) Net present value of alternate investments LO P3 Interstate Manufacturing is considering either overhauling an old machine or replacing it with a new machine. Information about the two alternatives follows. Management requires a 10% rate of return on its investments. (PV of$1. EV of $1. PVA of 31 and EVA of 5) (Use appropriate factor(s) from the tables provided.) ped Alternative 1: Keep the old machine and have it overhauled. This requires an initial investment of $146,000 and results in $55,000 of net cash flows in each of the next five years. After five years, it can be sold for a $23,000 salvage value eBook Alternative 2: Sell the old machine for $41,000 and buy a new one. The new machine requires on initial investment of $303,000 and can be sold for a $9,000 salvage value in five years. It would yield cost savings and higher sales, resulting in net cash flows of $46,000 in each of the next five years. Pent esences Required: 1. Determine the net present value of alternative 1. 2. Determine the net present value of alternative 2. 3. Which alternative should management select based on net present value? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the net present value of alternative 1. (Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.) Net Cash Flows Present Value Factors at 10% Present Value of Cash Flows V toped Book Pr esences Mr Rue of deauve 2 3. Which alternative should management select based on net present value? Complete this question by entering your answers in the tabs below. Required 11 Required 2 Required 3 Required 2 Determine the net prese vone of alternative 1. (Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.) Net Cash Flows Present Value Factors at 10% Present Value of Cash Flows Year 1-5 Salvage value (year 5) Totals Initial investment Net present value Required 2 > YRAGEM eBook Pant References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Which alternative should management select based on net present value? Management should select