Problem 1 Bay City's Department of Public Works (DPW) is considering the replacement of some machinery. Th machinery has zero book value but its current market value is $960. One possible alternative is to invest in new machinery, which has a cost of $46,800. This new machinery would produce estimated an operating cash savings of $15,000. The estimated useful life of the new machinery is four years. The DPW is nual uses straight-line depreciation. The new machinery has an estimated salvage value of $2,400 at the end of four years. The investment in the new machinery would require an additional investment in working capital of $3,600, which would be recovered after four years If the DPW accepts this investment proposal, disposal of the old machinery and investment in the new equipment will take place on December 31, 20x4. The cash flows from the investment will occur during the calendar years 20x5 through 20x8. Required: Prepare a net-present-value analysis of the county DPW's machinery replacement decision. The city has a 10 percent hurdle rate