1,26-36B Using payback, ARR, and NPV with?cq unequal cash f1 line that needs attention The the current machine ar Gaynor Manufacturing, Inc, has a manufacturing refurb company is considering two options. Option 1 is to the machine to last another cight a cost of $1,600,000. If refurbished, GaynorexPrplace the machine at a cost of eurs and then have no residual value. Option2 residual value. Gaynor $3.800,000. A new machine would last 10 ycarswo options: expects the following net cash inflows from the Purchase New Machine 5 2,700,000 Refurbish Current Machine $ 400,000 370,000 320,000 270,000 220,000 220,000 220,000 220,000 Year 400,000 350,000 300,000 6 300,000 300,000 300,000 5,700,000 10 Total $2,240000 SS Gaynor uses straight-line depreciation and requires an annual return of 10%. Requirements 1. Compute the payback, the ARR, the NPV, and the profirability index of these options 2. Which option should Gaynor choose? Why