Sweet Acacia Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment.

Old Equipment

New Equipment

Cost

$$80\mathrm{.}640$

$$38,400$

Accumulated depreciation

$$40,500$

$8$ years

Estimated useful life

$8$ years

Remaining life

Salvage value in $8$ years

$$4,800$

Current salvage value

$$10,560$

$$0$

Annual cash operating costs

$$29,600$

Salvage value in $8$ years

Annual cash operating costs

$$35,400$

Cost

Depreciation is $$10,080$ per year for the old equipment. The straight$-$line depreciation method would be used for the new equipment over an eight$-$year period with salvage value of $$4,800.$

Calculate the net present value assuming a $15\%$ rate of return. $($Ignore income taxes.$)($If the net present value is negative, use either a negative sign preceding the number eg$.-45$ or parentheses e$.$g$.(45).$ For calculation purposes, use $5$ decimal places as displayed in the factor table provided, e$.$g$.1\mathrm{.}25124$ and final answer to O decimal places, e$.$g$.5,275.)$

Click here to view the factor table.

Net present value

$