Westland College has a telephone system that is in poor condition. The system either can be overhauled or replaced with a new system. The following data have been gathered concerning these two alternatives (Ignore income taxes.):

	Present System			Proposed New System
Purchase cost new	$	250,000		$	300,000
Accumulated depreciation	$	240,000			-
Overhaul costs needed now	$	230,000			-
Annual cash operating costs	$	180,000		$	170,000
Salvage value now	$	160,000			-
Salvage value at the end of 8 years	$	152,000		$	165,000
Working capital required		-		$	200,000

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.

Westland College uses a 10% discount rate and the total cost approach to capital budgeting analysis. Both alternatives are expected to have a useful life of eight years.

The net present value of the alternative of overhauling the present system is closest to:

$(1,279,316)

$(1,119,316)

$801,284

$(1,194,036)