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Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years

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Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million six months ago, Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $250,000. The new sewing machine would require a one-time, $85.000 training cost Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $390,000 400,000 411,000 426,000 434.000 435,000 436,000 2 3 4 5 6 7 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $400,000. This new equipment would require maintenance costs of $100.000 at the end of the fifth year. The cost of capital is 9% Click here to view the factor table. Use the net present value method to determine the following (if net present value is negative then enter with negative star precedive the number es 45 of parentheses es (45). Round present value answer to O decimal places, es 125. For calculation purposes, use decimal places as displayed in the factor table provided) Calculate the net present vakio The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $400,000. This new equipment would require maintenance costs of $100,000 at the end of the fifth year. The cost of capital is 9%. Click here to view the factor table, Use the net present value method to determine the following: (if net present value is negative then enter with negative sign preceding the number eg.-45 or parentheses eg (45). Round present value answer to decimal places, eg. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided) Calculate the net present value. Net present value $ Determine whether Hillsong should purchase the new machine to replace the existing machine

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