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 $ 241,846 . 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 $ 390,600

2 399,400

3 411,000

4 425,900

5 432,000 6

434,600

7 436,400

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 $ 379,400 . This new equipment would require maintenance costs of $ 94,200 at the end of the fifth year. The cost of capital is 9%.

Calculate the net present value.

Determine whether Hillsong should purchase the new machine to replace the existing machine?