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ABC Corporation has a machine that requires repairs or should be replaced. ABC as evaluated the two options and calculated the cash flows resulting from

ABC Corporation has a machine that requires repairs or should be replaced. ABC as evaluated the two options and calculated the cash flows resulting from each option as follows:

Option A: Repair the machine

Year Cash Flow
0 -$60,500.00
1 $15,500.00
2 $33,100.00
3 $17,500.00
4 $17,200.00
5 $10,700.00

Option B: Buy a new machine

Year Cash Flow
0 -$355,555.00
1 $53,300.00
2 $123,000.00
3 $113,800.00
4 $122,900.00
5 $120,100.00

Requirements:

1a. Compute payback for each option.

1b. Compute IRR for each option.

1c. Compute NPV and PI for each option using discount rates of 9%, 11%, 13%, and 17%

1d. Create an NPV profile chat with R on the x-axis and NPV on the y-axis. (Two lines each, one for NPV A and one for NPV B).

Thank you!

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