3. You are given the following present value factors at 13 percent, the Three-City Plastic Company's minimum desired rate of return. (14 points, 3 points sections a-d and 2 points section e) Present Value Present Value of End of Period of si an Annuity of si 1 0.88496 0.88496 2 0.78315 1.66810 3 0.69305 2.36115 4 0.61332 2.97447 0.54276 3.51723 0.48032 3.99755 7 0.42506 4.42261 8 0.37616 4.79877 The Three-City Plastic Company is considering the replacement of a piece of machinery. The old machine has a book value of S92,000 and a remaining estimated life of seven years, with no salvage value at that time. The current market value of the old machine is $69,400. The new machine will cost $211,000, including transportation and installation. It has an estimated life of seven years, with no salvage value then. Annual cash operating costs are $97,000 for the old machine and $68,000 for the new machine. a. Compute the present value of the operating cash outflows for the old machine. b. Compute the present value of the operating cash outflows for the new machine. c. Compute the present value of the cash operating savings if the new machine is purchased. d. What is the net.present value of the replacement alternative (remember that the salvage would lower your cost when considering whether to purchase the new piece of equipment or not)? e. Should the new machine be purchased, why or why not (based on your work in d)