5 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 2.85 by Tulsa's controller. points Option A Option B Initial investment Bea'aZE $ $ 454,808 Annual cash inflows 158, 808 Bea' 89T Annual cash outflows 78, BOB 75,808 Book Costs to rebuild 128, 808 Salvage value 24,838 Estimated useful life 8 years 3 years Ask Required: 1. Calculate NPV. (Future Value of $1.Present Value of $1. Future Value Annuity of $1, Present Value Annuity of $1.) 2. Determine which option Tulsa should select? Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Calculate NPV. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your "Present Values" to 2 decimal places. Show less & Option A: Year Cash Flowe PV factor Present Value 11% Initial Investment Annual Cash Flows 1-8 Cast to Rebuild 4 Salvage Net Present Value Option B Year Cash Flowe PV factor Present Value 11% Initial Investment Annual Cash Flows 1-8 Cost to Rebuild 4 Salvage Net Present Value \fTABLE 11.2A Present Value of $1 Periods 2% 3% 3.75% 4% 4.25% 5% 6% 7% 8% 0.9804 0.9709 0.9639 0.9615 0. 9592 0.9524 0.9434 0.9346 0.9259 0. 9612 0. 9426 0.9290 0.9246 0. 9201 0.9070 0. 8900 0.8734 0. 8573 0.9423 0. 9151 0. 8954 0. 8890 0. 8826 0. 8638 0. 8396 0. 8163 0. 7938 0.9238 0. 8885 0. 8631 0. 8548 0. 8466 0.8227 0. 7921 0. 7629 0.7350 0.9057 0. 8626 0. 8319 0. 8219 0. 8121 0.7835 0.7473 0. 7130 0. 6806 0. 8880 0. 8375 0. 8018 0. 7903 0. 7790 0.7462 0. 7050 0. 6663 0. 6302 0. 8706 0. 8131 0. 7728 0. 7599 0. 7473 0. 7107 0. 6651 0. 6227 0. 5835 0. 8535 0. 7894 0. 7449 0. 7307 0. 7168 0. 6768 0. 6274 0. 5820 0. 5403 0. 8368 0. 7664 0. 7180 0. 7026 0. 6876 0. 6446 0. 5919 0.5439 0. 5002 10 0. 8203 0. 7441 0. 6920 0. 6756 0. 6595 0. 6139 0. 5584 0. 5083 0. 4632 20 0. 6730 0. 5537 0. 4789 0. 4564 0. 4350 0. 3769 0. 3118 0 . 2584 0. 2145 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 0. 9174 0.9091 0.9009 0. 8929 0. 8850 0. 8772 0. 8696 0.8333 0. 8000 0. 8417 0. 8264 0. 8116 0. 7972 0. 7831 0. 7695 0. 7561 0. 6944 0. 6400 0. 7722 0. 7513 0. 7312 0. 7118 0. 6931 0. 6750 0. 6575 0. 5787 0. 5120 0. 7084 0. 6830 0. 6587 0. 6355 0. 6133 0. 5921 0. 5718 0. 4823 0. 4096 0. 6499 0. 6209 0. 5935 0. 5674 0. 5428 0. 5194 0. 4972 0. 4019 0. 3277 0.5963 0.5645 0.5346 0. 5066 0. 4803 0. 4556 0. 4323 0. 3349 0. 2621 0. 5470 0. 5132 0. 4817 0. 4523 0. 4251 0. 3996 0. 3759 0. 2791 0. 2097 0. 5019 0. 4665 0.4339 0. 4039 0. 3762 0. 3506 0. 3269 0. 2326 0. 1678 0. 4604 0. 4241 0. 3909 0. 3606 0. 3329 0. 3075 0. 2843 0. 1938 0. 1342 0. 4224 0. 3855 0. 3522 0. 3220 0. 2946 0. 2697 0. 2472 0. 1615 0. 1074 20 0. 1784 0. 1486 0. 1240 0. 1037 0. 0868 0. 0728 0. 0611 0. 0261 0. 0115TABLE 11.4A Present Value of Annuity of $1 Periods* 2% 3% 3.75% 4% 4. 25% 5% 6% 7% 8% 0.9804 0.9709 0.9639 0. 9615 0. 9592 0.9524 0.9434 0.9346 0.9259 1. 9416 1.9135 1. 8929 1. 8861 1. 8794 1. 8594 1.8334 1. 8080 1.7833 2.8839 2. 8286 2. 7883 2. 7751 2. 7620 2.7232 2.6730 2. 6243 2.5771 3.8077 3. 7171 3.6514 3.6299 3. 6086 3.5460 3.4651 3.3872 3. 3121 4. 7135 4.5797 4.4833 4. 4518 4. 4207 4.3295 4. 2124 4. 1002 3.9927 5. 6014 5 . 4172 5. 2851 5. 2421 5. 1997 5.0757 4.9173 4.7665 4.6229 6.4720 6. 2303 6. 0579 6. 0021 5.9470 5.7864 5.5824 5. 3893 5. 2064 7. 3255 7. 0197 6. 8028 6.7327 6. 6638 6.4632 6. 2098 5.9713 5. 7466 8. 1622 7. 7861 7.5208 7.4353 7. 3513 7. 1078 6. 8017 6.5152 6. 2469 10 8. 9826 8.5302 8. 2128 8. 1109 8. 0109 7. 7217 7.3601 7.0236 6.7101 20 16. 3514 14.8775 13.8962 13.5903 13. 2944 12. 4622 11.4699 10.5940 9. 8181 Periods* 9% 10% 11% 12% 13% 14% 15% 20% 25% 0. 9174 0.9091 0.9009 0. 8929 0. 8550 0. 8772 0. 8696 0. 8333 0. 8000 1. 7591 1. 7355 1. 7125 1. 6901 1. 6681 1. 6467 1. 6257 1.5278 1.4400 2. 5313 2. 4869 2. 4437 2. 4018 2. 3612 2. 3216 2.2832 2.1065 1.9520 3.2397 3.1699 3.1024 3.0373 2.9745 2.9137 2.8550 2. 5887 2. 3616 3.8897 3.7908 3. 6959 3. 6048 3.5172 3.4331 3.3522 2.9906 2. 6893 1 0 0 UP WNP 4. 4859 4.3553 4.2305 4. 1114 3.9975 3.8887 3. 7845 3.3255 2.9514 5.0330 4. 8684 4. 7122 4.5638 4. 4226 4. 2883 4. 1604 3. 6046 3. 1611 5.5348 5.3349 5. 1461 4.9676 4. 7988 4.6389 4. 4873 3.8372 3.3289 5.9952 5.7590 5.5370 5. 3282 5. 1317 4.9464 4. 7716 4. 0310 3.4631 10 6. 4177 6. 1446 5.8892 5. 6502 5.4262 5. 2161 5. 0188 4. 1925 3.5705 20 9. 1285 8. 5136 7.9633 7. 4694 7.0248 6.6231 6. 2593 4. 8696 3.9539TABLE 11.1A Future Value of $1 Periods 2 3% 3.75% 4% 4. 25% 5% 6% 7% 8% 1. 0000 1.0000 1. 0000 1.0000 1.0000 1.0000 1. 0900 1. 0900 1. 0900 1. 0200 1. 0300 1. 0375 1. 0400 1. 0425 1. 0500 1. 0600 1. 0700 1. 0800 1. 0404 1. 0609 1. 0764 1. 0816 1. 0868 1. 1025 1. 1236 1. 1449 1. 1664 1. 0612 1. 0927 1. 1168 1. 1249 1. 1330 1. 1576 1. 1910 1. 2250 1. 2597 1. 0824 1. 1255 1. 1587 1.1699 1. 1811 1. 2155 1. 2625 1. 3108 1. 3605 1. 1041 1. 1593 1. 2021 1. 2167 1. 2313 1. 2763 1. 3382 1. 4026 1. 4693 1. 1262 1. 1941 1. 2472 1. 2653 1. 2837 1. 3401 1. 4185 1.5007 1.5869 1. 1487 1. 2299 1. 2939 1. 3159 1. 3382 1. 4071 1. 5036 1. 6058 1. 7138 1. 1717 1. 2668 1. 3425 1. 3686 1. 3951 1.4775 1. 5938 1. 7182 1. 8509 1. 1951 1. 3048 1. 3928 1.4233 1. 4544 1. 5513 1. 6895 1. 8385 1.9990 10 1. 2190 1.3439 1. 4450 1. 4802 1. 5162 1. 6289 1. 7906 1.9672 2. 1589 20 1. 4859 1. 8061 2. 0882 2. 1911 2. 2989 2.6533 3. 2071 3. 8697 4. 6610 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 1. 0000 1. 0000 1. 0000 1. 0000 1. 0000 1. 0000 1. 0000 1.0900 1. 0000 1. 0900 1. 1000 1. 1100 1. 1200 1. 1300 1. 1400 1. 1500 1. 2000 1. 2500 1. 1881 1. 2100 1. 2321 1. 2544 1. 2769 1. 2996 1. 3225 1. 4400 1. 5625 1. 2950 1. 3310 1. 3676 1. 4049 1. 4429 1. 4815 1. 5209 1. 7280 1.9531 1. 4116 1. 4641 1. 5181 1.5735 1. 6305 1. 6890 1. 7490 2. 0736 2. 4414 1.5386 1. 6105 1. 6851 1. 7623 1. 8424 1.9254 2. 0114 2. 4883 3. 0518 1. 6771 1. 7716 1. 8704 1.9738 2. 0820 2. 1950 2. 3131 2.9860 3. 8147 1. 8280 1.9487 2. 0762 2. 2107 2. 3526 2.5023 2.6600 3.5832 4. 7684 1.9926 2. 1436 2. 3045 2.4760 2. 6584 2. 8526 3.0590 4. 2998 5.9605 2. 1719 2.3579 2.5580 2.7731 3.0040 3. 2519 3. 5179 5. 1598 7. 4506 10 2.3674 2.5937 2. 8394 3.1058 3. 3946 3.7072 4. 0456 6. 1917 9. 3132 20 5.6044 6.7275 8. 0623 9. 6463 11. 5231 13.7435 16.3665 38.3376 86.7362