Carla Vista Inc, manufactures snowsuits. Carla Vista is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased 5 years ago at a price of $1.8 million 6 months ago, Carla Vista spent $55,000 to keep it operational. The existing sewing machine can be sold today for $243,773. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7 Year 1 2 3 4. $389,600 400,100 410,700 426,000 433,400 434,700 436,900 5 6 7 The new sewing machine would be depreciated according to the declining balance method at a rate of 20%. The salvage value is expected to be $379,700. This new equipment would require maintenance costs of $99,500 at the end of the fifth year. The cost of capitalis 9%. Click here to view PV table Calculate the net present value. (If net present value da negative then enter with negative sin preceding the number est. -45 or parentheses es.(45). Round present value answer to decimal places, c.8. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided) Net present value $ Based on the net present value, should Carla Vista purchase the new machine to replace the existing machine? TABLE 1 Future Value of 1 (5) Periods 5% 6% 7% 8% 9% 10% 11% 12% 15% 0 1.00000 1.00000 1.00000 1.00000 1.00000 1.000000 1.00000 1.00000 1.00000 1.00000 115000 1 1.05000 1.06000 1.11000 1.1 2000 1.04000 1.08160 1.07000 1.14490 1.08000 1.16640 1.09000 1.18810 2 1.10250 1.10000 1.21000 1.33100 1.23210 1.25440 1.12360 1.19102 1.32250 3 1.12486 1.15763 1.25971 1.29503 1.40493 1.22504 1.31080 1.36763 1.51807 1.52088 1.74901 4 1.16986 1.21551 1.26248 1.36049 1.41158 1.46410 1.57352 1.76234 5 1.21665 1.27628 133823 1.40255 1.46933 1.53862 1.61051 1.68506 2.01136 6 1.26532 1.34010 1.50073 1.58687 1.67710 1.77156 1.97382 2.31306 1.41852 1.50363 1.87041 2.07616 1.31593 1.82804 1.94872 2.21068 7 8 1.40710 1.47746 1.60578 1.71819 1.71382 1.85093 2.66002 3.05902 1.36857 1.59385 2.30454 2.47596 1.99256 2.17189 2.14359 2.35795 9 1.42331 2.77308 1.55133 1.62889 1.68948 1.790RS 1.83846 1.96715 1.99900 2.15892 2.55803 2.83942 3.51788 4.04556 10 1.48024 2.36736 2.59374 3.10585 11 1.71034 1.89830 2.10485 2.33164 2.58043 2.85312 3.47855 4.65239 1.53945 1.60103 3.15176 3.49845 12 1.79586 2.01220 2.25219 2.51817 2.81267 3.13843 5.35025 3.89598 4.36349 13 2.13293 1.66507 1.73168 1.88565 1.97993 2.07893 2.40985 2.57853 2.75903 14 2.71962 2.93719 3.17217 3.45227 3.79750 3.06581 3.34173 3.64248 3.88328 4.31044 2.26090 6.15279 7,07571 4.88711 5.47357 15 1.80094 2.39656 4.17725 4.78459 8.13706 16 1.87298 2.95216 3.42594 4.59497 5.31089 6.13019 9.35762 2.18287 2.29202 2.54035 2.69277 3.97031 4.32763 17 1.94790 6,86604 10.76126 3.15882 3.37993 3.70002 3.99602 5.89509 6,54355 18 2.40662 2.85434 2,02582 2.10685 5.05447 5.55992 6.11591 4.71712 5.14166 7.68997 8.61276 12.37545 14.23177 19 2.52695 3.02560 3.61653 7.26334 4,31570 4.66096 20 2.19112 2.65330 3.20714 3.86968 5.60141 6.72750 8.06231 9.6-1629 16.30654
