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Interstate Manufacturing is considering either replacing one of its old machines with a new machine...

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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 8% rate of return on its investments. Use the (PV of \$1. FV of \$1. PVA of \$1, and EVA of \$1) (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. 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. 2. Determine the net present value of alternative 2 . 2. Determine the net present value of alternative 2. 3. Which alternative should management select

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