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Beryl's lced Tea currently rents a bottling machine for $52,000 per year, including atl 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 $52,000 per year, including atl 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 $21,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $255,000. This machine will require $16,000 per year in ongoing maintenance expenses and will lower bottling costs by $10,000 per year. Also, $36,000 will be spent upfront training the new operators of the machine. Suppose the appropriate discount rate is 7% per year and the machine is purchased today. Maintenance and botling costs are paid at tho 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 10 -year lifo wath a negligible salvage value. The corporate tax rate is 28%. Should Bery's lced Tea continue to rent, purchase its current machine, or purchase the advanced machine? Note: To make this decision, calculate the NPV of the FCF associated with each aternative. The NPV will be negative, and ropresents the PV of the costs of the machine in each case. The NPV of renting the machine is $ (Round to the nearest dollar. Entor a negative NPV as a negative value.)

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