P11-54 (similar to) Question Help The Kingston Ale Company has an old brewing machine with a net disposal value of 13,000 now and 3,500 five years from now. A new brewing machine is offered for 42,000 cash or 29,000 with a trade-in. The new machine will result in an annual operating cash outflow of 41,000 as compared with the old machine's annual outflow of 45,000. The disposal value of the new machine 5 years hence will be 1,950. The required rate of return is 7%. The company uses DCF techniques to guide these decisions. Click the icon to view the present value factor table.) E: (Click the icon to view the present value annuity factor table.) Requirement 1. Should Kingston Ale acquire the new brewing machine? Show your calculations. Company procedures require the computing of the PV of each alternative. The most desirable alternative is the one with the least cost. Assume that the PV of 1 at 7% for 5 years is 0.713; the PV of an annuity of 1 at 7% for 5 years is 4.1002. Start by calculating the present value of the old machine to be given up. (Enter the present value factor to four decimal places, "X.XXXX." Use parentheses or a minus sign for amounts to be subtracted. Round the total present value to the nearest whole number.) Present Value of $1 Annual Net Total Present at 5 years, 7% Cash Flows Value Net present value-old machine: Present value of annuity of equal annual cash outflows for operating costs cash inflows from disposal value per year = x per year = Net present value