The following information is available concerning the purchase of a new piece of equipment in order to replace old equipment: Initial investment . . .. ..... ....... $152,000 Annual cost savings ...... .. ....... $ 56,600 Working capital needed now ........ $ 27, 100 Salvage value in 8 years . . ... . . . .. $ 30,000 Overhaul required in 5 years . .. . . . $ 41,600 Cost of capital .. . . .... ........... 9% Life of equipment . ... . .. . . . 8 years Income tax rate . . . . . 25% Assume the following regarding this potential investment: 12 The working capital needed now will be released at the end of the 8 years for investment elsewhere. 2) If the new equipment is purchased, the old equipment can be sold at the time the new equipment is purchased for $14, 400. 3) If the new equipment is purchased, a maintenance contract will need to be purchased for the first three years of ownership. The maintenance contract will cost $16, 400 each year for the first three years. Calculate the net present value of the new piece of equipment. To answer this question use the present value table factors given below. No credit will be awarded for this question using a means other than the table factors given below to answer this question. Factors from the present value of a lump sum table for: 1 - 9%: 0 =1 1 - 3 n -4 n - 5 n - 6 n -7 n - 8 0.920 0.770 0.710 0. 640 0.590 0.550 0.510 Factors from the present value of an annuity table for: 1 - 9%: 1 = 1 n - 3 n -4 n -5 n - 6 n -7 n - 8 0.920 2.520 3.240 3.890 4.490 5.030 5.640