X Company is trying to decide whether to continue using old equipment to make Product A or replace it with new equipment that will have lower operating costs. The following information is available: The new equipment will cost $50,000. Disposal value at the end of its 5-year useful life will be $5,500. The old equipment was purchased 3 years ago for $23,000. It can be sold immediately for $5,000 but will have zero disposal value in 5 years. Maintenance work, costing $3,000, will be necessary on the old equipment in Year 4. The new equipment will result in $10,000 of operating cost savings each year. Assuming a discount rate of 4%, what is the net present value of replacing the old equipment with the new equipment? [Note: Use the Present Value tables in the Coursepack.] E: $10,771 OF: $12,171 A: $6,606 Submit Answer B: $7,465c: $8,435 OD: $9,532 Tries 0/99