Beryl's Iced Tea currently rents a bottling machine for $ $51$ comma $000$ per$$ year, including all maintenance expenses. It is considering purchasing a machine instead and is comparing two$$ options:

a$.$ Purchase the machine it is currently renting for $ $155$ comma $000.$ This machine will require $ $23$ comma $000$ per year in ongoing maintenance expenses.

b$.$ Purchase a$$ new, more advanced machine for $ $260$ comma $000.$ This machine will require $ $17$ comma $000$ per year in ongoing maintenance expenses and will lower bottling costs by $ $13$ comma $000$ per year.$$ Also, $ $39$ comma $000$ will be spent up front training the new operators of the machine.

Suppose the appropriate discount rate is $7\%$ per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each$$ year, as is the rental of the machine. Assume also that the machines will be depreciated via the$$ straight$-$line method over seven years and that they have a$$ ten$-$year life with a negligible salvage value. The marginal corporate tax rate is $40\%.$

Should$$ Beryl's Iced Tea continue to$$ rent, purchase its current$$ machine, or purchase the advanced$$ machine? To make this$$ decision, calculate the NPV of the FCF associated with each alternative.

Question content area bottom

Part $1$

The NPV of renting the current machine is $$$

$$

enter your response here. $($Round to the nearest$$ dollar.$)$

Part $2$

The NPV of purchasing the current machine is $$$

$$

enter your response here. $($Round to the nearest$$ dollar.$)$

Part $3$

The NPV of purchasing the advanced machine is $$$

$$

enter your response here. $($Round to the nearest$$ dollar.$)$

Part $4$

Which of the following is the best$$ choice? $($Select the best choice$$ below.$)$

A$.$

Rent the current machine.

B$.$

Purchase the advanced machine.

C$.$

Purchase the current machine.