Bill Zimmerman is evaluating two new business opportunities. Each of the opportunities shown below has a ten-year life. Bill uses a 11% discount rate.

Option 1 Equipment purchase and installation $81,980

Annual Cash flow $28,600

Equipment overhaul in year 3 $4,950

Option 2 Equipment purchase and installation $70,200

Annual cash flow $30,840

Equipment overhaul in year 5 - $6,000

a) Calculate the Net presnet value of the two oppourtnites (Round present value factor calculations to 4 decimal places, e.g. 1.2514 and the final answers to 0 decimal places, e.g. 59,991.)

b) Calculate the profitability index of the two opportunities (Round answers to 2 decimal places, e.g. 15.25.)

c) Which option should Bill choose?