1. Compute the payback, the ARR, the NPV, and the profitability index of these two options.

2. Which option should Joslin choose? Why?

Joslin Manufacturing, Inc. has a manufacturing machine that needs attention. (Click the icon to view Present Value of $1 table.) (Click the icon to view additional information.) ( Click the icon to view Present Value of Ordinary Annuity of $1 table.) Joslin expects the following net cash inflows from the two options: (Click the icon to view the net cash flows.) (Click the icon to view Future Value of $1 table.) Joslin uses straight-line depreciation and requires an annual return of 14%. (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. Compute the payback for both options. Begin by completing the payback schedule for Option 1 (refurbish). (Round your answer to one decimal place.) The payback for Option 1 (refurbish current machine) is years. Data table More info The company is considering two options. Option 1 is to refurbish the current machine at a cost of $2,600,000. If refurbished, Joslin expects the machine to last another eight years and then have no residual value. Option 2 is to replace the machine at a cost of $4,600,000. A new machine would last 10 years and have no residual value