problem 11-6a (static) net present value of alternate investments lo p3 interstate manufacturing is considering either overhauling an old machine or replacing it with a new machine. information about the two alternatives follows. management requires a 10% rate of return on its investments. (pv of $1, fv of $1, pva of $1, and fva of $1) (use appropriate factor(s) from the tables provided.) alternative 1: keep the old machine and have it overhauled. this requires an initial investment of $150,000 and results in $50,000 of net cash flows in each of the next five years. after five years, it can be sold for a $15,000 salvage value. alternative 2: sell the old machine for $29,000 and buy a new one. the new machine requires an initial investment of $300,000 and can be sold for a $20,000 salvage value in five years. it would yield cost savings and higher sales, resulting in net cash flows of $65,000 in each of the next five years. required: 1. determine the net present value of alternative 1. 2. determine the net present value of alternative 2. 3. which alternative should management select based on net present value?
