The Kingston Ale Company has an old brewing machine with a net disposal value of 14,600 now and 24.150 five years from now. A new brewing machine is offered for 52,000 cash or 37,500 with a trade-in. The new machine will result in an annual operating cash outflow of 37,000 as compared with the old machine's annual outflow of 55,000. The disposal value of the new machine 5 years hence will be 1,700. The required rate of retum is 10%. The company uses DCF techniques to guide these decisions. Click the icon to view the present value factor table.) Click the icon to view the present value annuity factor table.) Requirement 1. Should Kingston Ale acquire the new brewing machine? Show your calculations. Company procedures require the computing of the PV of each alternative. The most desirable alternative is the one with the least cost. Assume that the PV of 1 at 10% for 5 years is 0.0200; the PV of an annuity of 1 at 10% for 5 years is 3.7008 Start by ontoulating the present value of the old machine to be given up. (Enter the present value factor to four decimal places, "X.XXXX* Use parentheses or a minus sign for amounts to be subtracted. Round the total present value to the nearest whole number) Present Value of $1 Annual Net Total Present at 5 years, 10% Cash Flows Value Net present value-old machine: Present value of annuity of equal annual cash outflows for operating costs cash inflows from disposal value per year per year Net present value Present Value of $1 Period 3% 4% 5% 6% 7% 8% 10% 12% 14% 16% 18% 20% 25% 1 9700 9815 9524 .9434 .9348 .9259 .9091 8929 8772 .8621 8475 .8333, 8000 2 .9428 9248 .9070 8900 .8734 .8573 .8284 7972 .78957432 .7182 .8944 8400 3 9151 8890 .8838 8398 8163 .7938 7513 .7118 .67506407 .8086 .5787 -5120 4 8885 8548 .8227 7921 7620 7350 .8830 -6355 .5921 5523 5158 4823 4096 5 8628 8219 7835 7473 7130 .8806 .8209 5674 5194 4781 4371 4019 3277 B 8375 7903 .7462 7050 6663 .6302 5645 5086 4558 4104 3704 3349 2621 7 .8131 7599 7107 .6651 6227 5835 5132 4523 3996 3538 3139 2791 2007 8 7894 7307 6788 16274 5820 5403 4865 4030 3500 3050 2880 2328 1678 7884 7028 8446 5919 5430 5002 4241 3808 3075 2830 2255 1938 1342 7441 6750 8130 5584 5083 4632 3855 3220 2097 2287 1911 1815 1074 15 8410 5553 4810 4173 3624 3152 2304 1827 1401 1079 0835 0049 18 0352 5874 4930 4155 3503 2950 2502 1790 1300 0940 0601 0508 0378 20 0180 5537 4584 3700 3118 2584 2145 1480 1037 07280514 0385 0201 0115 25 3751 2053 2330 184 1400 0923 0588 0378 0245 0180 0105 0038 Print Done Present Value of Ordinary Annuity of $1 Period 3% 4% 5% 6% 7% 8% 10% 12% 14% 16% 18% 20% 25% .9709 9815 9524 .9434 .9346 .9259 .9091 .8929 .8772 .8621 .8475 .8333 8000 2 1.9135 1.8881 1.8504 1.8334 1.8080 1.7833 1.7355 1.8901 1.8467 1.6052 1.5656 1.5278 1.4400 3 2.8286 2.7751 2.7232 2.8730 2.6243 2.5771 2.4869 2.4018 2.3216 2.2459 2. 1743 2.1065 1.9520 4 3.7171 3.6290 3.5480 3.4851 3.3872 3.3121 3.1699 3.0373 2.9137 2.7982 2.6901 2.5887 2.3816 5 4.5797 4.4518 4.3295 4.2124 4.1002 5.4172 5.2421 5.0757 4.9173 4.7885 7 6.2303 6.0021 5.7884 5.5824 5.3893 8.2098 5.9713 8 7.0197 6.7327 6.4632 9 7.7881 7.4353 7.1078 6.8017 6.5152 3.9927 3.7908 3.8048 3.4331 3.2743 3.1272 2.9908 2.6893 4.8229 4.3553 4.1114 3.8887 3.6847 3.4976 3.3255 2.9514 5.2004 4.8684 4.5638 4.2883 4.0388 3.8115 3.6048 3.1611 5.7486 5.3349 4.9078 4.6389 4.3436 4.0778 3.8372 3.3289 6.2460 5.7500 5.3282 4.9484 4.8065 4.3030 4.0310 3.4831 6.7101 6.1446 5.6502 5.2 161 4.8332 4.4941 4.1925 3.5705 8.5595 7.8081 6.8109 6.1422 5.5755 5.0916 4.8755 3.8593 9.37198.2014 7.2497 8.46745.8178 5.2732 4.8122 3.9279 9.8181 8.5136 7.4804 8.8231 5.9288 5.3527 4.8008 3.0530 10 8.5302 8.1100 7.7217 73801 7.0230 15 18 11.0379 11.1184 10.3707 9.7122 0.1079 13.7535 12.6503 11.6800 10.8278 10.0501 14.8775 13.590312 4822 11.4899 10.5040 17 4131 15.8221 14.0039 12.7834 11.6530 20 25 10.6748 9.0770 7.8431 0.8729 0.09715.4809 4.9478 3.0849 Print Done