C reations is one of the largest producers of miniature ships in a bottle. An especially complex part of one of the ships needs special production equipment that is not useful for other products. The company purchased this equipment early in 2016 for $200,000. It is now early in 2020, and the manager of the Model Ships Division, Jeri Finley, is thinking about purchasing new equipment to make this part. The current equipment will last for six more years with zero disposal value at that time. It can be sold immediately for $25,000. The following are last year's total manufacturing costs, when production was 8,000 ships: Direct materials Direct labor Variable overhead Fixed overhead Total $31,200 30,800 12,800 37,200 $112,000 The cost of the new equipment is $135,000. It has a six year useful life with an estimated disposal value at that time of $35,000. The sales representative sing the new equipment stated "The new equipment will allow direct labor and variable overhead combined to be reduced by a total of 12.20 per unit. Finley think this estimate is accurate, but is knows that a higher quality of direct material will be necessary with the new equipment, costing 10.21 more per unit. Fixed overhead costs will decrease by $5,000 Finley expects production to be 8,450 ships in each of the next six years. Assume a discount rate of 5% REQUIRED 1. What is the difference in net present values i Nautical Creations buys the new equipment instead of keeping their current equipment