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X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $66,000 per year;
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $66,000 per year; operating costs with the new machine are expected to be $50,000 per year. The new machine will cost $68,000 and will last for 4 years, at which time it can be sold for $3,000. The current machine will also last for 4 more years but will have zero salvage value. Its current disposal value is $5,000. Assuming a discount rate of 8%, what is the net present value of replacing the current machine? [Note: For the capital budgeting questions, use the Present Value tables in the Coursepack or with the link after the last exam question.] A: $-4,872| OB: $-5,700 | OC: $-6,669|| OD: $-7,803 E: $-9,130|| OF: $-10,682
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