Your company offers train tours around the suburbs of Victoria. The company currently owns six ExpressT3 trains that it is considering replacing with three SuperRailX trains. You have been given the following estimates of costs etc. for each train model: ExpressT3 Estimates SuperRailX Estimates Estimated remaining 570000 life 5 years Cost Estimated scrap years Estimated life: 10 value: Now $ 53600 Estimated scrap value: In 5 years' time $ 11200 In 5 years' time $228000 In 10 years' time Annual net cash flows $100000 Annual net cash flows $ $114000 228000 Your company has also been informed of the progress of a new innovation TechnoRail, which is expected to be available in 5 years. The following estimates of costs etc. per TechnoRail have been provided: Cost TechnoRail Estimated life Estimated disposal value: After 5 years' operation After 15 years' operation Annual net cash flows Estimates $698000 15 years $228000 $ 64000 $292000 It is considered that two of the new TechnoRail will be adequate to carry the estimated number of passengers. Other information is as follows: Your company cannot foresee any further developments beyond the TechnoRail. The annual net cash flows are received at the end of each year. The company's required rate of return is 8 per cent per annum. Ignore taxes. What is the NPV if the firm retains the ExpressT3 for 5 years, and then replaces them with TechnoRail. TechnoRail is replaced by TechnoRail always at the end of its useful life. Net present value