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		Option 2
Equipment purchase and installation		$72,000		$83,270
Annual cash flow		$28,800		$30,860
Equipment overhaul in year 3		$4,620		-
Equipment overhaul in year 5		-		$5,990

Calculate the net present value of the two opportunities. (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.)

	Option 1	Option 2
Net present value

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

	Option 1	Option 2
Profitability Index

Which option should Bill choose?