1.Please help me to describe the circumstances of the following case

2.kindly teach me how to recommend a course of action.

3.please help me to explain your approach to the problem,

4.kindly teach me how to perform relevant calculations and analysis, and

5.kindly assist me to formulate a recommendation.

Case :

A manufacturing company is evaluating two options for new equipment to introduce a new product to its suite of goods. The details for each option are provided below:

Option 1

$65,000 for equipment with useful life of 7 years and no salvage value.

Maintenance costs are expected to be $2,700 per year and increase by 3% in Year 6 and remain at that rate.

Materials in Year 1 are estimated to be $15,000 but remain constant at $10,000 per year for the remaining years.

Labor is estimated to start at $70,000 in Year 1, increasing by 3% each year after.

Revenues are estimated to be:

Year 10

Year 275,000

Year 3100,000

Year 4125,000

Year 5150,000

Year 6150,000

Year 7150,000

Option 2

$85,000 for equipment with useful life of 7 years and a $13,000 salvage value

Maintenance costs are expected to be $3,500 per year and increase by 3% in Year 6 and remain at that rate.

Materials in Year 1 are estimated to be $20,000 but remain constant at $15,000 per year for the remaining years.

Labor is estimated to start at $60,000 in Year 1, increasing by 3% each year after.

Revenues are estimated to be:

Year 1-

Year 280,000

Year 395,000

Year 4130,000

Year 5140,000

Year 6150,000

Year 7160,000

The company's required rate of return is 8%.

Management has turned to its finance and accounting department to perform analyses and make a recommendation on which option to choose. They have requested that the four main capital budgeting calculations be done: NPV, IRR, Payback Period, and ARR for each option.

1.please help me to compute all required amounts and

2.please teach me to explain how the computations were performed.

3.kindly help me to evaluate the results for each option and

4.please help me to explain what the results mean.

5.kindly assist me to recommend which option the company should pursue, based on the analysis.