Woolrich Company's market research division has projected a substantial increase in demand over the next several years for one of the company's products. To meet this demand, the company will need to...

Woolrich Company's market research division has projected a substantial increase in demand over the next several years for one of the company's products. To meet this demand, the company will need to produce units as follows:

Alternative 1. The company could purchase another model 2600 machine that would operate along with the one it now owns. The following information is available on this alternative:

The model 2600 machine now in use was purchased for $165,000 four years ago. Its present book value is $99,000, and its present market value is $90,000.

A new model 2600 machine costs $180,000 now. The old model 2600 machine will have to be replaced in six years at a cost of $200,000. The replacement machine will have a market value of about $100,000 when it is four years old.

Alternative 2. The company could purchase a model 5200 machine and use the old model 2600 machine as standby equipment. The model 5200 machine is a high-speed unit with double the capacity of the model 2600 machine. The following information is available on this alternative:

Both the model 2600 machine and the model 5200 machine have a 10-year life from the time they are first used in production. The scrap value of both machines is negligible and can be ignored. Straight-line depreciation is used by the company.

No other factory costs would change as a result of the decision between the two machines.

Woolrich Company uses an 18% discount rate. (Ignore income taxes.)

Click here to view Exhibit 11B-1 andExhibit 11B-2, to determine the appropriate discount factor(s) using tables.

What is the net present value of alternative 1? (Use the total cost approach.)
(Round PV discount factor(s) to 3 decimal places. Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, other intermediate calculations and final answer to the nearest whole dollar.)

What is the net present value of alternative 2? (Use the total cost approach.)
(Round PV discount factor(s) to 3 decimal places. Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, other intermediate calculations and final answer to the nearest whole dollar.)