2 of 4 (0 XI Requirements Data Table mad -) om the Year Refurbish Current Purchase New 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options 2. Which option should Mandel choose? Why? Machine fires a 2.140,000 $ Machine 140.000 $ 450,000 1 2 460 000 Print Done 3 380.000 380 000 300,000 RR, the 4 220.000 5 More Info by com 6 300,000 220.000 220,000 220.000 220,000 220.000 220.000 Cash In 7 Ad 220.000 8 The company is considering two options. Option 1 is to refurbish the current machine at a cost of $1.200.000. If refurbished. Mandel 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 $2,300 000. A new machine would last 10 years and have no residual value 9 220.000 220.000 10 $ 2.160 000 $ 4 500 000 Total Pont Done Print Done ber in the input fields and then continue to the next question o (Click the icon to view Present Value of $1 table) Mandel Manufacturing, Inc. has a manufacturing machine that needs attention AlClick the icon to view additional information ) Mandel expects the following net cash inflows from the two options: (Click the icon to view the net cash flows) Mandel uses straight-line depreciation and requires an annual return of 14% (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table ) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements 10 (n = 10) Total PV of cash inflows 0 Initial investment Net present value of the project Finally, compute the profitability index for each option. (Round to two decimal places XXX.) = Profitability index Refurbish Purchase Requirement 2. Which option should Mandel choose? Why? Review your answers in Requirement 1 Mandel should choose because this option has a payback period, an ARR that is the other option, a NPV, and its profitability index is Choose from any list or enter any number in the input fields and then continue to the next question Type here to search