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 10% 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 $109,000 Cost of old machine 149,000 Cost of overhaul 107,000 Annual expected revenues generated 47,000 Annual cash operating costs after overhaul 23,000 Salvage value of old machine in 5 years 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 $303,000 Cost of new machine 40,000 Salvage value of old machine now 94,000 Annual expected revenues generated 28,000 Annual cash operating costs 11,000 Salvage value of new machine in 5 years