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Beryl's lced Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead and is

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Beryl's lced Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead and is comparing two options: a. Purchaso the machine it is currently renting for $150,000. This machine will require $23,000 per year in ongoing maintenance expenses b. Purchase a new, more advanced machine for $265,000. This machine will require $16,000 per year in ongoing maintenance expenses and will lower bottling cost by $13,000 per year. Also, $37,000 will be spent up front to train the new operators of the machine. Suppose the appropriate discount rate is 9% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the cost of the rental machine. Assume also that the machines will be depreciated via the straight-line method over seven years and that they have a 10 -year Hfo with a negigible salvage value. The marginal corporate tax rate is 30%. Should Beryrs loed Tea continue to rent, purchase its current machine, or purchase the advancod machine? To make this decision, calculate the NPV of the FCF associated with each altemative. The NPV of renting the current machine is ? (Round to the nearest dollar.) The NPV of purchasing the current machine is $ (Round to the noarest dollar.)

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