Chris Anderson is evaluating two new business opportunities. Each of the opportunities shown below has a 15-year life. Chris uses a 12% discount rate.

		Option 1		Option 2
Equipment purchase and installation		$70,300		$80,830
Annual cash flow		$27,200		$29,660
Equipment overhaul in year 6		$4,540		-
Equipment overhaul in year 8		-		$6,030

Click here to view the factor table: https://education.wiley.com/content/Davis_Managerial_Accounting_4e/media/simulations/pv_tables/Tables_App_9-1_9-2.pdf

(a) 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

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

	Option 1	Option 2
Profitability Index

(c) Which option should Chris choose? Option 1 or Option 2?