Please help me to solve this problem Thank you. Old BackhoesNew BackhoesPurchase cost when new$89,000$198,095Salvage value now$41,900Investment in major overhaul needed in next year$55,130Salvage value in 8 years$15,000$91,000Remaining life8 years8 yearsNet cash flow generated each year$29,800$44,500(1) Using the net present value method for buying new orkeeping the old. (For calculation purposes, use 5decimal places as displayed in the factor tableprovided. If the net present value is negative, useeither a negative sign preceding the number eg -45 orparentheses eg (45). Round final answer to 0 decimalplaces, e.g. 5,275.)New BackhoesOld BackhoesNet Present Value$ Waterways puts much emphasis on cash flowwhen it plans for capital investments. Thecompany chose its discount rate of 8% basedon the rate of return it must pay its ownersand creditors. Using that rate, Waterwaysthen uses different methods to determinethe best decisions for making capital outlays.This year Waterways is considering buyingfive new backhoes to replace the backhoes itnow has. The new backhoes are faster, costless to run, provide for more accurate trenchdigging, have comfort features for theoperators, and have 1-year maintenanceagreements to go with them. The oldbackhoes are working just fine, but they dorequire considerable maintenance. Thebackhoe operators are very familiar with theold backhoes and would need to learn somenew skills to use the new backhoes.The following information is available to usein deciding whether to purchase the newbackhoes.

The net Present Value method is a capital budgeting technique in which the present values of all the…

Old Backhoes New Backhoes Purchase cost when new $89,000 $198,095 Salvage value now $41,900 Investment in major overhaul needed in next year $5,130 Salvage value in 8 years $15,000 $91,000 Remaining life 8 years 8 years Net cash flow generated each year $29,800 $44,500 (1) Using the net present value method for buying new or keeping the old. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round final answer to 0 decimal places, e.g. 5,275.) New Backhoes Old Backhoes Net Present Value $