Interstate Manufacturing is considering either replacing one of its old machines with a new machine or having the old machine overhauled. Information about the two alternatives follows. Management requires a 12% rate of return on its investments. Use the (PV of $1, EV of $1, PWA of $1, and EVA of $1 (Use appropriate factor(s) from the tables provided.) Alternative 1: Keep the old machine and have it overhauled. If the old machine is overhauled, it will be kept for another five years and then sold for its salvage value. $108,000 Cost of old machine 156,000 Cost of overhaul 105,000 Annual expected revenues generated Annual cash operating costs after overhaul 48,000 Salvage value of old machine in 5 years 20,000 Alternative 2: Sell the old machine and buy a new one. The new machine is more efficient and will yield substantial operating cost savings with more product being produced and sold. $304,000 Cost of new machine 43,000 Salvage value of old machine now 90,000 Annual expected revenues generated 21,000 Annual cash operating costs 6,000 Salvage value of new machine in 5 years