Question 3Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $163,608 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual cash flows of $30,600. Management also believes that the new bottling machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 11%. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Calculate the net present value.(If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answer to 0 decimal places, e.g. 125.)

Net present value

$

How much would the reduction in downtime have to be worth in order for the project to be acceptable?(Round answer to 0 decimal places, e.g. 125.)

$

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