1.	Calculate net present value of each of the options and determine which option Belue should select using the NPV criterion.
2.	What nonfinancial factors should Belue consider before making its choice?

The Belue Company is a national portable building manufacturer. Its Benton plant will become idle on December 31, 2017. Mary Carter, Present Value of $1 table the corporate controller, has been asked to look at three options regarding the plant: Present Value of Annuity of $1 table cectroller, has (Click the icon to view the options.) Belue Company treats al cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Belue is Read the raouirernants subject to a 30% tax rate on al income, including capital gains. Requirement 1. Calculate net present value of each of the options and determine which option Belue should select using the NPV criterion The net present value of Option 1 is S Begin he calculation a Option 2 by determining the after-tax cash nflaw or rent. Then, determine the after-tax cashin ow or the material purchases count Finaly. deter ne he after-tax cash n aw on sale o the lant and he total net present value N PV of Option 2 Use factors to three decimal places, Xxxx, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whale dollar.) Net Cash Present Value nflw of Cash Flows More Into PV factor Present value of net cash flows, Option: After-tax cash inflows from rent: Option 1: The plant, which has been fully depreciated for tax purposes, can be sold immediately for $710,000 Option 2: The plant can be leased to the Timber Corporation, one of Belue's suppliers, for 4 years. Under the lease terms, Timber would pay Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Belue $170,000 rent per year (payable at year-end) and would grant Belue a $58,000 annual discount from the nomal price of lumber purchased by Belue. (Assume that the discount is received at year-end for each of the 4 years.) Timber would bear all of the plant's ownership costs. Belue expects to sell this plant for $200.000 at the end of the 4-year lease. The plant could be used for 4 years to make porch swings as an accessory to be sold with a portable building. Fixed owerhead costs (a cash outflow) before any equipment upgrades are estimated to be $24,000 annually for the 4-year period. The swings are expected to sell for $48 each. Variable cost per unit is expected to be S27. The following production and sales of swings are expected: 2018, 18,000 units; 2019, 22.000 units; 2020, 21,000 units; 2021, 16,000 units. In order to manufacture the swings, some of the plant equipment would need to be upgraded at an immediate cost of $200,000. The equipment would be depreciated using the straight-line depreciation method and zero terminal disposal value over the 4 years it would be in use. Because of the equipment upgrades, Belue could sel the plant for $370,000 at the end of 4 years. No change in working capital would be required Option 3: a27. The following