Efficient equipment

Maintenance work will be necessary on the new equipment in Year 3, costing $3,000. The current equipment will last for five more years; the life of the new equipment is also five years. Assuming a discount rate of 5%, what is the net present value of replacing the current equipment?X Company must decide whether to continue using its current equipment or replace it with new, more efficient equipment. The following information is available for the current and new equipment:Current equipmentCurrent sales value$5,000Final sales value6,000Operating costs69,000New equipmentPurchase cost$55,000Final sales value6,000Operating cost savings9,50

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