4 E11-11 (Static) Using NPV to Evaluate Mutually Exclusive Projects [LO 11-5) 2 points Tulsa Company is considering investing in new bottling equipment and has two options: Option A has a lower initial cost but would require a significant expenditure to rebuild the machine after four years: Option B has higher maintenance costs, but also has a higher salvage value at the end of its useful life. Tulsa's cost of capital is 11 percent. The following estimates of the cash flows were developed by Tulsa's controller Book Initial investiment Annual cash inflows Annual cash out low Costs to rebuild Salvage value Estimated useful Life Option Option $ 320,000 $ 454,000 150,000 160,000 70,000 75,000 120,000 0 0 24,000 8 years years Print References Required: Calculate NPV (Euture Value of $1. Present Value of $1. Euture Value Annuity of S1. Present Value Annuity of 51) (Use appropriate factor(s) from the tables provided. Negative amounts should be Indicated by a minus sign. Round your "Present Values to the nearest whole dollar amount.) Option : Year Cash Flows Present Value PV factor 11% 0 Initial Investment Option : Year Cash Flows PV factor Present Value 11% 0 1-8 Initial Investment Annual Cash Flows Cost to Rebuild Salvage Net Present Value 4 8 Option B: Year Cash Flows PV factor Present Value 11% 0 1-8 Initial Investment Annual Cash Flows Cost to Rebuild Salvage Net Present Value 4 8 Determine which option Tulsa should select? O Option B O Option A