Desking whether to purchase the new backhoes Old Backhoes New Backhoes Purchase cost when new $91,400 $199,994 Salvage value now $41,400 Investment in major overhaul needed in next year $54,112 Salvage value in 8 years $15.200 $88.000 Remaining life Net cash flow generated each year 8 years $30,400 8 years $44,300 Click here to view PV table. (a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment. (Hint: For the old machine, the initial investment is the cost of the overhaul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment) (1) Using the net present value method for buying new or keeping the old. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round final answer to O decimal places, e.g. 5.275.) New Backhoes Old Backhoes Question 1 of 1 Waterways should retain Old Backhoes equipment. (3) Comparing the profitability index for each choice. (Round answers to 2 decimal places, e.g. 1.25) New Backhoes Profitability Index 1.90 Waterways should retain Old Backhoes equipment. Old Backhoes 365 9.17/10 E Calculate the internal rate of return factor for the new and old blackhoes. (Round answers to 5 decimal places, e.g. 5.27647.) New Backhoes Old Backhoes