Feed the Hungry Foundation is a non-profit organization that has a cost of capital of 12 percent. The foundation is considering the replacement of a piece of equipment. The old machine has a book value of $3,000 and a remaining estimated life of 5 years with no salvage value at that time. The salvage value of the old machine is currently $1,500. The new equipment will cost $10,000. It has an estimated life of 5 years with no salvage value then. Annual cash operating costs are $4,000 for the old machine and $2,000 for the new machine.

A- Refer to Feed the Hungry Foundation. What is the present value of the operating cash outflows for the old machine?

B- Refer to Feed the Hungry Foundation. What is the present value of the operating cash outflows for the new machine?

C- Refer to Feed the Hungry Foundation. What is the present value of salvage value of the old machine if it is replaced now?

D- Refer to Feed the Hungry Foundation. Would you advise the organization to replace the machine?