A company is considering either buying a new machine or overhauling an old machine. Information about the alternative machines follows. The company requires a 12% rate of return on its investments. Note: Use appropriate factor(s) from the tobles provided. (PV of S1, EV of S1, PVA of S1, and EVA of S1) Alternative 1: Overhaul the old machine and keep it. This requires an initial investment of $159,000 and results in $45,000 of net cash flows in each of the next five years. After five years, this machine can be sold for a $21,000 salvage value Alternative 2: Sell the old machine for $39,000 and buy a new one. This requires an initial investment of $314,000 and results in $52.000 of net cash flows in each of the next five years. After five years, this machine can be sold for a $12.000 salvage value Enter answers in the tabs below. Determine the net present value of alternative 1. Note: Negative net present values should be indicated with a minus sign. Do not round intermediate caiculations. Round any present value factor to 4 decimals and final answers to the nearest whole dollar. A company is considerting elther buying a new machine or overhauling an old machine. Information about the alternative machines follows. The compiny requires a 12% rate of return on its investments. Note: Use oppropriate foctor(v) from the tobles provided. (PV. of S1. EV of 51. PVA. of 51, and EVA of Si) Alternative 1: Overhaul the old machine and keep it. This requires an initial investment of $159.000 and results in $45.000 of net cash flows in each of the next five years. Ater five years. this machine can be sold for a 521,000 salvage value Alternotive 2: Sell the old machine for $39,000 and buy a new one. This requires an initial investment of $314,000 and results in $52,000 of net cash flows in each of the next five years. Ater five years, this machine can be sold for a $12,000 salvage value. Inter answers in the tabs below. Determine the net persent value of alteinative 2 . Hote: Wegative net present values shoud be indicated with a minur sign, Do not round intermediate calculations. Round any present value facter to 4 sedmals and final anwers to the neareit whole dollat. A company is considering either buying a new machine or overhauling an old machine. Information about the alternative machines follows. The company requires a 12% rate of return on its investments Note: Use oppropriate foctor(s) from the tables provided. (PV of S1. EV of S1. PVA of S1. and EVA of S1) Alternotive 1: Overhaul the old machine and keep it. This requires an initial investment of $159,000 and results in $45,000 of net cash flows in each of the next five years. After five years, this machine can be sold for a $21,000 salvage value Alternative 2: Sell the old machine for $39,000 and buy a new one. This requires an initial investment of $314,000 and results in $52,000 of net cash flows in each of the next five years. After five years, this machine can be sold for a $12,000 salvage value Enter answers in the tabs below. Which alternative should management select based on net presen value
