1. The Carnival Company is considering the purchase of a new spinning top machine. It has two options: Option A: The cost is $1,000,000, a useful life of 4 years and an estimated residual value of $0. Option B: The cost is $1,500,000, a useful life of 4 years and an estimated residual value of $0. Currently, the company rents a spinning top machine. If the machine is purchased, annual rental payments of $400,000 would be saved. Option B would save this same amount and would have an additional savings in labor costs of $100,000 each year, because of the greater capabilities of that machine. (.5 point each for total of 3). a) Compute the payback period of each option SISA b) Calculate the net present value of each option assuming a cost of capital of 8%. The present value factor of an annuity for 4 years at 8% is 3.3121 c) Based on the above analysis, which option should the company pursue? d) Please give two reasons for your answer in d. a. b. SX lejon sol eulisy Inseen