velu 11.12 points Interstate Manufacturing is considering either replacing one of its old machines with a new machine or having the old machine overhauled. Information about the two alternatives follows. Management requires a 10% rate of return on its investments. Use the PV of S1. FV of S1, PMA of S1, and FMA of S1) Use appropriate factor(s) from the tables provided.) Alternative 1: Keep the old machine and have it overhauled. If the old machine is overhauled, it will be kept for another five years and then sold for its salvage value. $119,000 Cost of old machine 150,000 Cost of overhaul Annual expected revenues generated 117,000 Annual cash operating costs after overhaul 38,000 Salvage value of old machine in 5 years 24,000 Alternative 2: Sell the old machine and buy a new one. The new machine is more efficient and will yield substantial operating cost savings with more product being produced and sold $299.000 Cost of new machine 31,000 Salvage value of old machine now Annual expected revenues generated 91,000 Annual cash operating costs 31,000 Salvage value of new machine in 5 years 12,000