EIF Manufacturing Company needs to overhaul its drill press or buy a new one. The facts have been gathered, and they are as follows:

	Current Machine	New Machine
Purchase Price, New	$80,000	$100,000
Current book value	33,000
Overhaul needed now	40,000
Annual cash operating costs	70,000	40,000
Current salvage value	20,000
Salvage value in five years	5,000	20,000

Required:

Calculate the NPV of both keeping the current drill press and buying a new one. Which alternative is the most desirable with a current required rate of return of 20%? Show computations, and assume no taxes.