Skysong, a large manufacturing company, currently uses a large printing press in its operations and is considering two replacements:

the PDX$341$ and PDW$581.$ The PDX costs $$490,000$ and has annual maintenance costs of $$9,000$ for the first $5$ years and $$14,000$ for

the next $10$ years. After $15$ years, the PDX will be scrapped $($salvage value is zero$).$ In contrast, the PDW can be acquired for $$122,500$

and requires maintenance of $$28,000$ a year for its $10-$year life. The salvage value of the PDW is expected to be zero in $10$ years.

Assuming that Skysong must replace its current printing press $($it has stopped functioning$),$ has a$($n$)10-$percent cost of capital, and all

cash flows are after tax, which replacement press is the most appropriate? $($Round answers to $2$ decimal places, e$.$g$.125\mathrm{.}25.)$

Chain Replication Approach:

NPV of PDX$341$

$

NPV of PDW$581$

$

We would prefer

Equivalent Annual NPV Approach:

Equivalent Annual NPV of PDX$341$

Equivalent Annual NPV of PDW$581$

$

We would prefer