(Click the icon to view additional information.) Alton expects the following net cash inflows from the two options: (Click the icon to view the net cash flows.) Alton uses straight-line depreciation and requires an annual return of 14%. Requirement 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. Compute the payback for both options. Begin by completing the payback schedule for Option 1 (refurbish). Net Cash Inflows Net Cash Outflows Year Amount Invested Annual 0 $ 1,300,000 1 2 3 4 More info Accumulated The company is considering two options. Option 1 is to refurbish the current machine at a cost of $1,300,000. If refurbished, Alton expects the machine to last another eight years and then have no residual value. Option 2 is to replace the machine at a cost of $1,600,000. A new machine would last 10 years and have no residual value. Requirements 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. 2. Which option should Alton choose? Why? C E Data table - Refurbish Current Purchase New Year Machine Machine Year 1 $ 460,000 $ 200.000 Year 2 440,000 520,000 Year 3 360,000 440,000 Year 4 280.000 360,000 Year 5 200,000 280,000 Year 6 200,000 280,000 Year 7 200,000 280,000 Year 8 200,000 280,000 Year 9 280,000 280.000 D . O