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 8% rate of return on its investments. Use the (PV of $1, FV of $1, PVA of $1, and FVA 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. Cost of old machine $118,000 153,000 Cost of overhaul Annual expected revenues generated Annual cash operating costs after overhaul Salvage value of old machine in 5 years 87,000 34,000 24,000 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. Cost of new machine $292,000 Salvage value of old machine now Annual expected revenues generated Annual cash operating costs Salvage value of new machine in 5 years 33,000 103,000 21,000 15,000 Required: 1. Determine the net present value of alternative 1. Initial cash investment (net) Chart values are based on: Subsequent Cash inflow (outflow) Present Value Table factor = Year 1. Determine the net present value of alternative 1. Initial cash investment (net) Chart values are based on: Subsequent Cash inflow (outflow) Present Value Year X Table factor 1 2 3 4 1O 5 $ 0 2. Determine the net present value of alternative 2. Initial cash investment (net) Subsequent Cash inflow Year Present Value x Table factor (outflow) 1 2 3 5 Now $ 3. Which alternative should management select