Beryl's Iced Tea currently rents a bottling machine for $$54,000$ per$$ 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 $$165,000.$ This machine will require $$20,000$ per year in ongoing maintenance expenses.

b$.$ Purchase a$$ new, more advanced machine for $$260,000.$ This machine will require $$19,000$ per year in ongoing maintenance expenses and will lower bottling costs by $$12,000$ per year.$$ Also, $$40,000$ will be spent up front training the new operators of the machine.

Suppose the appropriate discount rate is $8\%$ 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 $38\%.$

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.

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Part $1$

The NPV of renting the current machine is $$$$$enter your response here. $($Round to the nearest$$ dollar.$)$