Interstate Manufacturing is considering either overhauling an old machine or replacing it with a new machine. Information about the two alternatives follows. Management requires a $10\%$ rate of return on its investments. $($PV of $$1,$ FV of $$1,$ PVA of $$1,$ and FVA of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided.

Alternative $1$: Keep the old machine and have it overhauled. This requires an initial investment of $$152,000$ and results in $$39,000$ of net cash flows in each of the next five years. After five years, it can be sold for a $$20,000$ salvage value.

Alternative $2$: Sell the old machine for $$48,000$ and buy a new one. The new machine requires an initial investment of $$304,000$ and can be sold for a $$6,000$ salvage value in five years. It would yield cost savings and higher sales, resulting in net cash flows of $$45,000$ in each of the next five years.

Required:

Determine the net present value of alternative $1.$

Determine the net present value of alternative $2.$

Which alternative should management select based on net present value?