complete

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 8% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1 ) (Use appropriate factor(s) from the tables provided.) Alternative 1: Keep the old machine and have it overhauled. This requires an initial investment of $158,000 and results in $37,000 of net cash flows in each of the next five years. After five years, it can be sold for a $18,000 salvage value. Alternative 2: Sell the old machine for $41,000 and buy a new one. The new machine requires an initial investment of $290,000 and can be sold for a $15,000 salvage value in five years. It would yield cost savings and higher sales, resulting in net cash flows of $56,000 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? Determine the net present value of alternative 1 . (Do not round intermedia 4 decimals and final answers to the nearest whole dollar.) Determine the net present value of alternative 2. (Negative net present values should be i round intermediate calculations. Round your present value factor to 4 decimals and final a Which alternative should management select based on net present value