The supervisor of the county Departmetn of Transportation (DOT) is considering the replacement of some machinery. This machinery has zero book value but its current market value is $920. One possible alternative is to invest in new machinery, which has a cost of $40,200. This new machinery would produce estimated annual operating cash savings of $13,100. The estimated useful life of the new machinery is 4 years. The DOT uses straight-line depreciation. The new machinery has an estimated capital of $3,000 which would be recovered after 4 years.

If the DOT accepts this investement proposal, disposal of the old machinery and investment in the new equipment will take place on December 31, 20X1. The cash flows from the investment will occur during the calendar years 20X2 through 20X5.

Required:

Prepare a net present value analysis of the county DOT's machinery replacement decision. The county has a 10% hurdle rate. (Round your "discount factors" to 3 decimal places and final dollar amounts to whole dollars. Negative amounts should be indicated by a minus sign).

	Time 0	Time 1	Time 2	Time 3	Time 4
Acquistion cost
Investment in working capital
Recovery of working capital
Salvage value of old machinery
Salvage of value of new machinery
Annual operating cash savings
Total cash flow
Discount factor
Present value
Net present value	XXXXXX	XXXXXXX	XXXXXX	XXXXXX