Colston Manufacturing, Inc. has a manufacturing machine that needs attention (Click the icon to view additional information.) Colston expects the following net cash inflows from the two options: (Click the icon to view the net cash flows) Colston uses straight-line depreciation and requires an annual return of 14% - X More Info + The company is considering two options. Option 1 is to refurbish the current machine at a cost of $1,400,000. If refurbished, Colston 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 $4,600 000. A new machine would last 10 years and have no residual value Print Done (Click the icon to view F X Data Table Year Year 1 Year 2 Year 3 Year 4 Year 5 Refurbish Current Purchase New Machine Machine $ 160,000 $ 3,210,000 450,000 620 000 360,000 530,000 270.000 440 000 180,000 350,000 180,000 350,000 180,000 360,000 180,000 350,000 350.000 350,000 $ 1,960,000 $ 6,900 000 Year 6 Year 7 Year 8 Year 9 Year 10 Total Print Done - X Requirements 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options 2. Which option should Colston choose? Why? Print Done 5% Present Value of $1 1% Periods 3% 6% 296 7% $% 9% 10% 129% 16% 14% 1994 15% 2094 Period 1 0.990 | 0.9800971 0.962 0.952 0943 0.936 0.926 0 917 0.9090.893 0877 0370 08620.84710833 Period 2 0 9800 961 0.943 0.925 0.9070890 0.873 0.8570.842 0.826 0797 0.769 0.756 0743 0713 0.694 Period 3 09710 942 0.915 0.8890 864 0.840 0816 0.7940.772 0.751 0.712 067506580641 0 6090.579 Period 4 0.9610,924 0888 0.8560.823 0792 0763 0.736 0708 0.6830636 05920,572 6.562 0.5160482 Period 5 09610 906 0.863 0.822 0.784 0.747 0.713 | 0681 0.6500 621 0 567 0 $190 4970 476 8.4370.402 Period 6 0.9420.88% 0 837 0.7900 746 0705 0.6660.6300 596 0564 0 507 04560,4320 4100 3700 335 Period 7 0.933 0.87108130 760 0.711 0.655 0.623 0.583 054705130452 0.4000376 0.354 0314279 Periods 0 923 0 853 0.7890731 0.677 0.627 0.582 0640 0.52 04670,404 0351 0.32703066 2660.233 Period 9 0.91408370766 0.70306450692 0 544 0 500 0460 0.4240361 0.308 0 284 0.263 0225 0194 Period 10 0.9060.820 0.744 06760.614 0668 0 505 0463 0.4220 386 0.322 0.270 0247 0227 0.191 0.162 Period 11 08960 8040.722 0.650 055 0527 0 475 0.429 0388 035002370 2370 215 0.1950 1620 135 Period 12 0887 0.788 0 701 0.625 0 557 0497 0.444 0.3970356 0.319 0257 0.208 01870168 0.137/0.112 Period 13 0 379 0.7730681 0.601 0.530 0.469 0.415 0368 0.3260 290 0.229 0182 0.163 0 1450 1160093 Period 14 0.8700753 0.661 05770.5060.4420388 0.340 0299 0.263 0 2050.160 0.141 0.125 0.099 0.078 Period 15 0 861 0743 0642 0566 0 481 0417 0.362 0315 0.2750 239 0.1830 140/ 0123 0.1080840065 Period 16 0 853 072 0 6230 $340.4680.394 0239 0.292 0262 02131 0163 0.128 6.107 0.093 0071 6054 Period 17 10 84416.714 0.505 05130.436 0371 0317 0 270 0231 0.1980146 0.108 0090 0.00 0.0600 045 Period 19 10336 0700 0,587 104940416 0 360 0.296 0.250 02120/1800 130 0.096 0.081 0.069 07051 0.038 Period 19 10.828 0.686 0 670 6.475 0.396 0331 0277 0232 0.1940 164 0.116 0.083 0.0700060010430031 Period 20 0.8200 673 0 66404560,377 0.312 0258 0216 0 1780.149 0 104 0.073 0061 0.061/10 037 0.026 Period 21 10.811 0660 0536 0.439 03690294 0 242 0.199 0.1640135 0.0980064 063 0044 0.001 0.022 Period 22 0 303 0.64705220422 0342 0.278 0226 0 184 0.150 0.123 0.033 0,056 0,046 0.038 0.026 0,018 Period 23 10.796 0.6340.507 0.4060.3260 262 0.211 0.1700.138 0 112007400490040 0.0330022 0.015 Period 24 07880,622 0.492 0.390 0.310 0 247 0197 0.15 0.126 0.1020.066 0043 0035 0.028 0.019 0.013 Period 25 10 780 0.610 0.478 0 375 | 0295 0.233 0184 0.146 0.116 0092 0.059 0,038 0.0300024 0.0160.010 Period 26 10 7720.698 04640361 0281 0220 0.172 0136 0 1060084 0.053 0.033 0.025 0.021 0.014 0.009 Period 27 10.764 0.686 0 450 03470268 0 207 0 161 0.125 0.098 0.0760047 0.0290.023 0.0180011 0.007 Period 28 10.75705740437 0.333 0256 0.1960.150 0.116 0.090 0.0690.042 0.026002000160010 0,006 Period 29 10 7490563 0424 0.321 0243 0.186 0141 0.107 0.082 0.0630037 0,022 0.01% 0.014 0.008 0.006 Period 30 10 7420 552 0.412 03080231 0.174 0131 0.099 0.075 0.067 0.03300200016 0.0120.007 0.004 Period 40 10 6720453 0.307 02080.142 0,097 0.067 0.046 0032 0.022 0.01 0.0060/0040000 0,001 0.001 Period 50 106080372 0.22 0.14100870 064 0.034 0021 0.013 0.0090.003 0001 0.001 0.001 Present Value of Ordinary Ainuity of $1 Periods 19% 2% 3% 494 5% 696 7% 896 994 1094 1296 1494 15% 1694 18% 20% Period 1 0 990 0.9800 971 0 962 0.952 0943 0.935 0.926 0917 0.9090.893 0.877 0.870 0.862 0.847 0.833 Period 2 1.9701 942 1913 1.886 1859 1833 1.8031783 1759 1.736 1.6901.6471 626 1.605 1.566 1.528 Period 3 2 941 2.884 2.8292775 2.723 2673 2624 2577 2631 2487 2.40223222283 2246 2.174 2.106 Period 4 3 9023 8033.717 3.630354634653387 33123 240 3.170 3,0372 914 2856 2.799 2.690 2,589 Period 5 4.853 4.713 4580 4452 4.3294212 4.100 3.993 3.890 3.791 3.605 3.433 33523274 3.127 2.991 Period 6 5.795 5601 5.417 6242 5076 4 917 4.767 4.623 4 486 4356 4 111 3.889 3.784 3.685 3498 3326 Period 7 67236.472 6230 6.002 5786.6.5825389 6206 5.033 4868 45644 288 4160 4.0393 812 3 606 Periods 7.6527325 70206 733 6.463 6210 5971 5 747 5.535 5335 4.968 4 639 4487 4344 40783.837 Period 9 8.5663.162 7786743571086 802 6515 6 247 6.9955.7595328 | 4.946 4.7724.607 4.303 4.031 Period 10 9471 8 983 86308,111 17.722 7360 7.024 6.710 6.418 6.145 5650 5216 5019 48334494 4.192 Period 11 10.368 9.7879 253 8.760330678877 499 7139 6.8056.495 5.933 5.453 5 2345 029 4.656 4327 Period 12 11 255 10 575 9 954 93858 8638384 7943 7.536 71616814 6.1946 660 5.421 5.197 4.793 4.439 Period 13 12 134 11 348 10.636 99869.3948.853 8363 7904 74877 103 6.4245842 5.583 5 342 4.910 4 533 Period 14 13.004 12 106 11 296 10 563 989992958 745 824477367 367 6.6286002 5.724 5468 5.0084611 Period 15 13 865 12 849 1193811118 10 3809712 9.1088.5698.061760668116.142 6.847 6575 60924675 Period 16 14.71813.57812561 11.652 10 838|10.106 94478.8618313 7.824 6.9746265 5954 5.669 5.162 4.730 Period 17 15 562 14 292 13.166 12 166 11274110 477 9.763 9.1228544802271206.3736047 5.7495 222 4.775 Period 13 16 398 14992 13.754 12 659 11 690 10.828 10 059 9 3728 756 8201 7250 6.4676.128 5.818 52734.812 Period 19 17 226 15.6781432413.1341208511 15810.336 9.6049603.36573666560 6.1985.87753164844 Period 20 18.046 16351 14.877 13 590 12 46211 470 10.594 9818 9.1298 5147.4696.623 6259 5.929 5.353 4.870 Period 21 18857 17 011 15.415 14 029 12 821 11.764 10 836 10 0179292864975626.6876312 5 973 53844891 Period 22 19.660 17 65815.937 14.451 13.163 12.042 11 061 10 2019.4428.7727 645 6.74363596.011 5.410 4 909 Period 23 20.45618 29216 44414 857 13 489|1230311 272 10.371 9580 3,8837.718679263996044 5432 4.925 Period 24 21 24318.914 16.936 15 247 13.79912 550 11469 10.529 97079857.784 6.835 6.4346.073 5.451 4.937 Period 25 22 023 1952317413 15 622 14.0941278311664 1067598239.07778436.87364646.097 5.467 4948 Period 26 2279520.1211787715.983 14375 13.003 11.826 1081099299.161 7896 6.906 6.491 6.118 5.480 4956 Period 27 123.560 20.707 18 327 16 330 (14.64313 211|11.987 10935100279 237 7943 69356514 6.136 6.492 4964 Period 28 24 3162128118764 16663 1489813 406 12.137 11 061 10.116 930779846.961 6.5346.1625.5024970 Period 29 25066 21 344 19.188 16 984 15.14113.591 12278 11.158 10.1989.370 802269836561 6.166 5.510 4975 Period 30 25 308 22 396 19600 17 292 15372 13.765 12 409 11 258 10 274 9.4278056700365666 1776.517 4979 Period 40 32 835 27.355 23.116 19 793 17 15915046 13 332 11.925 10.757 9779 8.244 7.105 6.642 6233 5.548 4.997 Period 50 39196 31 424 25 730 21.482 18 2561576213 801 12 233 10.962 9.915 8 304 7.133 6.6616246 5.564 4 999 Annuity Periods Period 1 Period 2 Period 3 Period 4 Period 5 et Period 6 Period 7 Period Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 15 Period 19 Period 20 Future Value of $1 19% 2% 3% 4% 5% 69% 796 3% 99 1096 12% 149 1594 1.010 1.020 1030 1.040 1.050 1.060 1.070 1.090 1.090 1.100 1.120 1.140 1.150 1.0201 040 1.061 1.0821.103 1.1241.145 1.166 1.1881 210 1.254 1300 1323 1.030 1.06110931.125 1.158 1.1911.226 1.26012961331 1.406 1482 1.521 1.041 10821.126 1.17012161 262 | 1311 1360 1.4121464 157416891749 1.051 1.104 1.159 1217 1 276 1338 1403 1.469 1.539 1.611 1762 1.925 2011 1 0621 126 1.194 1265 1.340 1.4191501 15871677 1772 19742.195 2313 1.072 1.149 1230 1.316 1.407 1 5041.6061714 1 $281949 2.211 2 502 2.660 1083 11721267 1.369 1477 159417181.851 1993 2.144 2.476 2.8533059 1.094 11961305 1423 1661 1689 1.638 1999 2.172 23682.7733 2623 518 1.106 1219 1.3441480 1.6291 79119672.159 2367 2.594 3.106 3.7074046 1.116 1 243 1 384 1 539 1710 1 898 2.105 2332 25802853 3.479 42264.652 1127 1268 1426 1601 1.796 | 2012 | 22522618 2813 3.138 3396 4,818 5 350 1.138 12941.46916661.886 2133 24102 720 3.0663.462 4363 5.492 6.163 1.1491319 15131732 1.980 2261 2.679 2 937 3.342 3.793 4887 62617,076 1.161 1 346 1668 1.8012079 2 3972.769 3.1723 642 4177 5.4747138137 117313731.606 1.8732183 2540 2952 3.426 3.970 4.596613081379368 1.184 1.400 1653 1.948 2292 2693 3.159370043286.0546.8669276 10.76 1.196 1.4281.702 2.0262 4072 854 3.380 3.996 471765607 690 10.5 1238 1208146717542 107 2527 3.026 3.6174316 6.142 6.1163613 12.06 1423 122014861 806 2.1912 653 3 207 3 87046616604 6727 9.646 13 7416 37 123216161.860 2279 2786 3.400 4.141 5.0346.1097400 1080 16.67 18.82 12461 546 1916 2370 2 925 3 604 4 430 6 437 6.6698140 1210 17 06 21 64 1 2671577 1974246530723.8204741687172588964 13.66 20 36 2489 1 2701608 2.0332563 3.225 4,049 6.072 6.341 79119.860 15 18 23 212863 1.28216412094 2666 3.386 4 292 6.4276.348 8.623 10,83 17.00 2646 3292 1.295 1673 2.157 27723 666 45496 807 73969399119219,04 30 17 37.86 1 308 1.707 2 221 2883 3.733 482262147988 1025 1311 21 32 3439 43 54 1.321 1.741 2288 2 999 39206112 6649 3 627 11.17 14 4223 88 39 2060.07 1335 1776 23673.119 41165.4187 114931712.17 16:36 26.76 44.69 67 68 1348 1.8112 427 3243 4322 6743 7.612 10.06132717452996 60.966621 14892 2033 262 4801 7040 1029 14.97217231.41 46.2693,06 1889 2679 1646269243847107 11.47 18.42 29 46 46,307436 11742690 700 2 1,084 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 Period 40 Period 50 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 3 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Period 20 period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 Period 40 Period 50 Future Value of Ordinary Annuity of $1 1% 2% 3% 4% 594 696 7% 8% 996 1096 12% 14% 15% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2010 2020 2030 2040 2050 2060 2.070 2.080 2090 2.100 2120 2.140 2.150 3.030 3.060 3.091 3.122 3.1533.184 3215 3246 3278 3.310 3 374 3 440 3.473 4060 4.122 4.1844 246 4310 4375 4.440 4506 4.573 4641 4.7794.921 4 993 5.101 5204 5.309 5.416 5626 5.637 5.751 5.867 5 985 6.105 6.353 6.610 6.742 6.152 6.308 6.468 6.633 6.80269757.163 7 336 7523 7.71681158 536 8.754 7 214 7 4347662 7.898 8142 8.394 8.654 8923 9 2009 487 10.09 10.73 11.07 3.286 8583 8 89292149 5499.897 10.26010641103 11 44 12 30 13.23 13.73 9.369 9.755 10.16 10.58 11.0311 49 11.98 12.49 13.02 13.5 14.78 16.09 16.79 10.46 10 95 11.46 12.01 125813.18 13.82 14.49 15.19159417 55 19 34 20 30 11.57 12.17 12.81 13.49 14 21 14.97 1578 16.65 1756 18 53 20.65 23.04 24 35 126813.41 14.19 15.03 15 92 16 87 17.8918 98 20 14 21 38 24.13 27 2729.00 13.81 14.68 15.62 16.63 17.71 18.88 20.14 21 50 22 96 24.52 28.03 32.09 34 35 1495 15 97 17.09 18 29 19.60 21.02 22.56 2421 26.02 27.9832.39 37.68 40 50 16.10 17 29 1860 20.02 21.58 23 28 25.13 27 15 29.363177 37.28 43.8447.58 1726 18 64 20.16 21 8223.66 25.67 27 89 30 32 33.00 35.96 42.76 60.98 66 72 1843 20 01 21.76 23.70 25.84 28 21 30.84 33 75 36.974054 48 88 59.12 6508 19.61 21.41 23 41 2565 28 13 30.91 34.00 37 46 41 30 45 60 65.75 68 39 75.84 2081 2284 25.12 2767 30,54 33.76 37 38 41.45 46.02 61 16 63.44 789788 21 22.02 24 30 26 87 29.78 | 33.07 36 79 4100 45.76 51 16572872069102 1024 23 24 25.7828.68 3197 3572 39.994487 50.42 50.76640081.70 104.8 | 1188 24 47 27 30 30.54 3425 38.51 433949 01 66.46 6287714092 60 120 41376 25.72 28 85 32 45 36.62 41 43 4700 53 44 60 39 69.5379541046 1383 1593 26 97 30 42 34 43 39 08 44.50 50.82 6818 66.76 76 798 50 1182 158.7 1842 28 24 32.03 | 36 46 41.65 47.73 54.86 63.25 73 11 8470 9835 133 3 1819 2128 29.53 33.67 38.55 44 31 61.1 69.16 68 68 79.96 93.32 1092 150 3 208 3 245.7 30.82 35 34 40714708 54 67 63 71 74 488736 102.7 1211 169.42386 283.6 32.13 37.05 42 93 49.97 58.406853 30.70 96 34 113,0 134 2190.7 27293271 33.45 38 79 45 22 62.97 623273.64 87 35 1040 12411486 2146 312.1 3772 34.78 40 57 47 58 6608 66 44 79.06 94 46 113.3 1363 1645 2413 366,84347 48.8960.40 76.40 95.03 1208 154 1996 259 1 3379 4426 767 11,342 1,779 64.46 34.58 1128 16272093 2903 4065 573 8 81611164 2.400 4,9967 218