The management of Hummingbird Resorts and Spa Inc. has decided to that with effect July 1, 2020, the resort should be HACCAP certified. This move would require that the resort replace its existing vending stations in the resort. Five years ago, Hummingbird Resorts and Spa Inc. purchased the existing vending stations at a cost of $400,000. The resort uses a straight-line method to depreciate its vending stations with a ten-year expected life. Currently, the market value of old vending stations is $190,000. Hummingbird Resorts and Spa Inc. received a quotation from Restaurant Equipment and Supplies Inc. for new vending stations at a purchase price of $800,000. The installation cost is an additional $50,000 and the electrical service would have to be upgraded to accommodate the new vending stations. The cost of this upgrade is $30,000. The new vending stations is expected to last the resort 10- years. Over its 10-year life, it will reduce utility costs by $30,000 and generate additional revenue of $125,000 per year. The resort will be required to invest working capital requirements by $35,000 at the beginning of the replacement and this will be recovered at the end of the project. It is estimated that the new vending stations machine can be sold at the end of its life for $160,000. The resort uses a 12% cost of capital and is registered under the Tourism Development Act Cap 680 of the laws of Bimshire and therefore not subject to any taxation. Required Using the net present value method determine whether the new vending stations chould be installed 1 18 19 20 En