Check! 11 Problem 11-6A (Static) Net present value of alternate investments LO P3 Ons Pin Interstate Manufacturing is considering either overhauling an old machine or replacing it with a new machine. Information about the two alternatives follows. Management requires a 10% rate of return on its investments (PV of $1. EVO SI PVA 04-S1 and EVA (51) (Use appropriate factor(s) from the tables provided) Alternative 1: Keep the old machine and have it overhauled. This requires an initial investment of $150,000 and results in $50,000 of net cash flows in each of the next five years. After five years, it can be sold for a $15,000 salvage value Alternative 2: Sell the old machine for $29,000 and buy a new one. The new machine requires an initial investment of $300,000 and can be sold for a $20,000 salvage value in five years. It would yield cost savings and higher sales, resulting in net cash flows of $65,000 in each of the next five years. Required: 1. Determine the net present value of alternative 1. 2. Determine the net present value of alternative 2 3. Which alternative should management select based on net present value? Required) Required 2. Required 3 Required 1 Determine the net present value of alternative 1. (Do not round intermedia 4 decimals and final answers to the nearest whole dollar.) Net Cash Flows Present Value Factors at 10% Present Value of Cash Flows Year 1-5 Salvage value (year 5) Totals Initial investment Net present value Required 1 Required 2 Required 3 Determine the net present value of alternative 2. (Negative net present values should be indi round intermediate calculations. Round your present value factor to 4 decimals and final ans Net Cash Flows Present Value Factors at 10% Present Value of Cash Flows Year 1-5 Salvage valuenew machine Salvage value-old machine Totals Initial investment Net present value