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 X Data Table Refurbish Current Machine Purchase New Machine Year Year 1 $ Year 2 Year 3 Year 4 160,000 $ 450,000 360,000 270,000 180,000 180,000 180,000 180,000 Year 5 3,210.000 620,000 530,000 440.000 350,000 350.000 350,000 350,000 350,000 350 000 Year 6 Year 7 Year 8 Year 9 Year 10 $ 1,960,000 $ 6,900,000 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 Present Value of $1 Periods 1% 3% 296 4% 6% 79 $% 99% 5% 16% 10% 1994 129% 159 14% 20% Period 1 0.990 0.980 09710.9620.952 0943 0.936 0.926 0917 0.9090893 0877 0370 08620.8470838 Period 2 0 9800 961 0.943 0.925 0.9070890 0.873 0.8570.342 0.826 0.797 0.769 0.756 0.74307180.694 Period 3 09710 942 0.915 0.8890 864 0.840 0.816 0.794 0772 0.751 0.712 0.67506580641 0 6090.579 Period 4 0.9610.924 0.888 0.855 0823 0.7920763 0.736 0708 0.6830 636 05920,672 0.552 05160482 Period 5 0961 0 906 0.3630822 0.784 0.747 0.713 | 0681 06500 6210 567 05190497 0 476 0.437 | 0,402 Period 6 0.9420.88% 0 837 0.7900 746 0705 0.656 0.6300 596 0564 507 04560,432 0.4100 3700335 Period 7 0.933 0.871 0813 0 760 0.711 0.655 06230683054705130452 0.400 0376 0.354 0314279 Period & 0 923 0853 0.7890731 06770.627 0.682 0640 0.5420 467 0.404 0.351032703066266 0.233 Period 9 0.91410837 0766 0.7030645 10 592 0544 0 500 0460 0424 0.361 0308 0284 0.263 022510194 Period 10 10 906 0.8206.7440 676 0.614 0668 0 505 0.463 0.422 0.386 0.322 0.270 0247 022701910.162 Period 11 0896 0 8040.7220.65005850 527 0 475 0.42903880 350 0.2370 2370 216 0.1960.162 0.135 Period 12 088707880701 0.625 0 567 0497 0.444 0397 0356 0.319 | 0257 0.208 0.1870 168 0.137/10.112 Period 13 0.3790.7730681 0.001 0.530 0.469 0.415 0.368 0.3260 290 0.229 01820.163 0.146 0 1160093 Period 14 0.8700753 0.661 05770.5060.442 0388 0.340 0299 0.263 1 0 205 0.160 0.141 0125 0 099 0.078 Period 15 0861 0743 06420 566 0431 0417 0.362 0315 0.275 0239 0.1830 14001230108 084 0.065 Period 16 10 853 072 0 6230 $340.4680.394 0229 0.292 02520213 0.163 0128 6.107 0.0930071 0.054 Period 17 10 84416.714 0.505 05130.436 0371 0317 0270 0231 0.1980146 0.108 0090 0.00 0.00 0.045 Period 130.836 0.700 0,58704940416 0 360 0.296 0250 02120/1800 130 0 0950081 0.069 0151 0.038 Period 19 0.923 0686 0570 0.475 0.3960331 0277 0.232 0.1940 164 0.116 0.083 0.070 0.000 0430031 Period 20 0.8200 673 065404560,377 0.312 0 258 0216 0.178 0.1490 104 0.073 00610 061/10 037 0.026 Period 21 0.811 06600538 0.43903690294 0 242 0.199 0.16401360093 0064 063 0044 0.031 0.022 Period 22 0 303 0.647 0.522 0.422 034202780226 0.134 0.150 0.123 10.033 0,056 0,046 0.03 0.026 0.018 Period 23 10.79506340.507 6.4060.3260262 0.211 0.170 0.139 0.11200740049 0.040 0.0330022 0.015 Period 24 07380/6220,492 0.390 | 0 3100 247 0 1970 158 0.125 0.1020.066 0.0430038 0028 01019 0.013 Period 25 0730 0.610 0.470 275 0295 0.233 0184 0.146 0.116 0092 0.059 0.008 0.0300024 0.0160.010 Period 26 10 772 0.598 04640361 028102200.1720 1360 1060084 0.053 0.033 0.0025 0.021 0.014 0.009 Period 27 10.764 0.636 0 450 03470268 0 207 0161 0.125 0.098 0.076 0047 0 029 0,028 0.0180011 0.007 Period 28 075705740437 0.333 0256 0.1960.150 0.116 0.090 00690.042 0.026 020 00160016 0.006 Period 29 107490563 0424 0.3210243 0.185 0141 0.107 0.0820.0630.037 0,022 0.01% 0.014 0.008 0.006 Period 30 0 7420 662 0.412 03080.231 0.1740131 0.09900750067 0.03300200016 0.0120.007 0.004 Period 40 10 6720453 0,307 02080142 0,097 0.067 0.046 0032 0.022 0.0110.006 0.0040.000 0,00 0,001 Period 50 106080372 0.22 0.14100870054 0.034 0021 0.0130.0090.003 0.001 0.001 0.001 Present Value of Ordinary Ainuity of $1 Periods 196 2% 39% 494 5% 696 79 899 99 1094 1296 1496 1596 16% 20% 18% Period 1 09900930 0.971 09620.952 10 943 0935 0926 0917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 1970 1942 1913 1.886 1859 1833 1.803 1783 1759 1.736 1.6901.647 1626 1606 1.566 1.528 Period 3 2941 2.884 2.8292775 2.723 2673 2624 2577 2631 2487 2.402 2322 2283 2246 2.174 2.106 Period 4 3.902 3.808 3.717 3.6303546 3.465 3 387 3.3123 240 3.170 3037 2 914 28562.798 2690 2,589 Period 5 4853 4713 4.580 4452 4329 42124100 3.993 3.390 3.791 3.605 3.43333523274 3.127 2.991 Period 6 5.795 5.601 5.417 5242 5076 4917 4.767 4.623 44864356 4 111 3.889 3.784 3.6853 499 3326 Period 7 67236.472 6230 6.002 5.786 5.5825389 5 206 5.033 4868 45644288 4.160 40393812 3 606 Periods 765273257 0206 733 6.463 6210 5.971 5.7475.535 5335 4.968 4.639 4437 4344 4078 13.837 Period 9 8.566 3.162 77867 4357.1086 802 6515 6 247 5.9955.759 5328 | 4946 4.7724.607 4303 4.031 Period 10 9471 8 983 86308 111 7.72273607.024 6710 6.418 6145 5650 5216 5.019 4833 4494 4.192 Period 11 10.3689.7879253 8.760 3.3067887749971396.805 6.495 5.938 5.453 5.234 5.029 4.656 4327 Period 12 11 255 10 575 9 954 93858 863 83847 943 7.536 71616.814 6.194 6660 6.421 5.197 4.793 4.439 Period 13 12 134 11 348 10636 99869.3948.853 8 358 79047487 7.1036.424 6 842 5.583 5.342 4.910 4 533 Period 14 13.004 12 106 11 296 10 563 9.8999 2968745 8 244 77367 367 6.628 6.002 5.7245 468 5.008 4611 Period 15 13 865 12 849 1193811118 10 3809712 9.1088,569 8.0617 606 6 811 6.142 6.847 5.57550924 675 Period 16 1471813 578 12 561 11 652 10 838|10.106 94478.8618313 7.8246.97462655 9545.669 5.162 4.730 Period 17 15 562 14 292 13.166 12 166 11 27410 477 9763 9.1228544802271206373 6.047 5.749 5.222 4.775 Period 13 16 398 14992 13.754 12 659 11 690 10 828 10 059 9 3728 756 8201 72606.467 | 6.128 5.818 5273 4812 Period 19 17 226 15.6781432413.134 12.08511 15810.336 9.604 960 3.3657.3666.550 6.1985.8775 316 4844 Period 20 18.04616 351 14.877 13 590 12 462 11 470 10.5949818 9.129 851474696.623 62595.929 5.353 4.870 Period 21 18 857 17 011 15.41514 029 12 821 11.764 10.836 100179292 86497562 6.6876312 5.973 5384 4.891 Period 22 19.660 17 658 16.937 14.451 13.163|12042 11 061 10 201 94428.772 7.6466.74363596.011 5.410 4 909 Period 23 20.4561829216 44414 857 13 489|1230311 272 10.371 95808.8837718679263996.044 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 1952317 413 15 622 14.0941278311 654 1067598239.0777 843 6.87364646 0975.467 4 948 Period 26 22795 20.12117877 15.983 14 375 13.003 11 826 10 8109.929 9.1617.896 6.906 6.491 6.118 5.480 4966 Period 27 23 560 20.70718327 16.330 14 643 13 211 11.987 10 935 10 027 92377943 6.936 65146.136 5.492 4964 Period 28 24 316 (21 281 18 764 16663 1489813 406 12.13711 061 10.116 9.30779846961 6.5346.1625.502 4970 Period 29 25 066 21 844 19.188 16984 15.14113 59112278 11.158 10.198 9370802269836561 6.166 5.510 4975 Period 30 25 308 | 22 396 19600 17 292 15 372 13.765 12 409 11 258 10 274 9.427 8055700365666 1776.517 4979 Period 40 32 835 27.365 23.116 19 793 17 1591504613 332 11.925 10.76797798244 7.106 6.642 6233 5.548 4.997 Period 50 39196 31 424 25 730 21.482 18 2561576213 801 12 233 10.962 99158 304 7.133 6.6616246 5.554 4 999 Annuity Periods Period 1 Period 2 Period 3 Period 4 Period 5 et Period 6 Period 7 Periods 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 1% 25 3% 4% 5% 6% 786 3% 99 10% 12% 14% 15% 1010 1.020 1.030 1.040 1050 1060 1.070 1080 1.090 1.100 1.120 1.140 1.150 1.020 1040 1.061 10821103 1124 1.145 1.16611831210 1.254 1300 1323 1030 1061 10931.125 1.158 1.191 1226 1260 1296 1.331 1.406 1.4821521 1.041 1.0821.126 1.17012161 262 1311 1360 1.4121 464 1.5741.689 1.749 1.051 1.104 1.159 1217 1 276 1338 1403 1.469 1.539 1.611 1762 1925 2011 1 062 1.126 1.194 1265 1.340 1.4191501 1587 1.6771772 19742.195 2313 1.072 1.149 1230 1.316 1.407 15041.6061714182819492211 2 602 2.660 1.083 1 172 1267 1.369 1.477 1.694 1718 1.851 1.993 2144 2.476 2.8533059 1094 1196 1306 1 423 1661 1689 1.838 1999 2172 2368 27733 2623 518 1.105 1219 1 3441480 16291 7911 967 2.159 2367 2.694 3.106 3.7074046 1116124313841539 1710 1.898 2.105 2332 2580 2853 3.47942264.652 1 127 1268 1426 1601 1.796 | 2012 | 22522618 2813 3.138 3896 4,818 5350 1.138 1294 1.469 1665 1.886 2133 2410 2720 3.066 3.46243636.492 6 163 1.14913191 513 1.732 1.980 2261 2679 2 937 3.342 3.798 4387 62617.076 1.161 1346 1.658 1.801 2079 2 3972.769 3.1723 642 4177 6.47471388137 117313731.605 1.8732183 2540 29523426 3.970 459661308 137 9368 1.194 14001653 1.948 2292 2.693 3.159370043286.0546.8669276 10.76 1.1961.4281.7022026 2 4072 864 3.3803996 471765607 690 10.5 1238 1 208 1.45717542 107 2627 302636174316 6.142 6.1163613 12.06 1423 1220 1486 1 806 2191 2653 3 207 33704661 6604 6727 9.646 13 7416 37 123215161.860 2279 2786 3.400 4.141 6.034 6.1097400 1080 16.67 18.82 1.245 1.546 1916 2.370292536044430 6.437 6.6698140 12/10 17 06 21 64 1 267 1677 19742465 3.0723.82047416 871 | 72588964 13.66 20.362489 1270 1.608 2.03325633 225 4,049 5072 6.341 79119,860 1518 23 21 28 63 1.28216412094 2666 3386 4 2925.4276,348 8.623 10,83 17.00 2646 3292 1 295 1673 2.157 2772 3 566 454958077396939911921904 30 17 37.86 1 308 1.707 2 221 2883 3.733482262147988 1026 13.11 2132 34394354 1.321 1.741 2 288 2999 3.920 6.1126649 627 11.17 14 42 23 88 39 2060.07 1 335 1776 2357 3.119 41165.4187114931712.17 16 36 26.76 44.69 67 68 1348101124273 243 | 4322 6743 7612100613271745 29 96 60956621 1.4892 2033 2624 801 7040 10 29 14.9721723141 46.2693.06 1889 2679 1.646269243847 107 11.47 18.42 294646 90 74 36 117421907002 1,084 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 29 Period 29 Period 30 Period 40 Period 50 1 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 Future Value of Ordinary Annuity of $1 1% 2% 39% 4% 596 696 7% 8% 996 10% 12% 14% 1594 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 2070 2080 2090 2.100 2120 2.140 2.150 3.030 3.060 3.091 3.122 3.153 3.184 3215 3246 32783,3103 374 3440 3.473 4060 4.122 4.1844 246 4310 4375 4.440 4506 4.573 4641 4.779 4.921 4.993 5.101 5.204 6.309 1.416 5526 5.637 6.751 5.867 5.9856.105 6.353 6.610 6.742 6.152 6.308 6.468 6.633 6.80269757.1637336 7523 7.71681158 536 8.754 721474347.662 7.898 81428394 8.654 8.923 9200 9487 10.09 10.73 11.07 3 286 8583 289292149 549 9.897 10.26010641103 11.44 12 30 13.23 13.73 9369 9.755 10.16 10.58 11.03 11 49 11.98 12.4913.02 13.58 14.78 16.09 16.79 10.46 10 95 11.46 12.01 125813.18 13.82 14.49 1519159417 55 19.34 20.30 11 57 12.17 12 81 13.49 14 21 14.97 1578 16.65 1756 18.53 2065 23.04 24 35 1268 13.41 14.19 15.03 15.9216.87 17.8918 98 20.14 21 38 24.13 27 2729.00 1381 14 68 15.62 1663 1771 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 2266 2421 26.02 27 98 32.39 37.58 40 50 16.10 1729 1860 20.02 21.58 23 28 25 13 27 15 29.36 31.77 3728 43.84 4758 1726 18.64 20.16 21 8223.66 25.67 27 89 30 32 33.00 36.96 42.75 50 98 66.72 18.43 | 2001 21.76 23.70 25 84 | 28 21 30.84 33 75 3697 40.54 48 88 59.12 6608 19.61 2141 23.41 2565 28.13 30.91 34.00 37.4541 3045.60 66.76 68 39 75.84 2081 2284 25.12 2767 30,54 33.76 37 38 41.45 46 02 51 16 63.44 78 978821 22.02 24 30 26.87 29.78 | 33.07 36.79 4100 45.7651 16572872069102 1024 23 24 25.7828.68 31.97357239.99 44.87 50.42 50.76640081.70 104.8 | 118,8 24 47 27 30 30 54 3425 38.51 43 39 49.01 65.46 62 87714092 60 120 4 1376 25.72 288632.45 36 624143 47 00 63 44 60.39 69.63 79 54 1046 138 31593 26 97 30.42 34 43 39 08 44.50 50.82 68.18 66.76 76.79 38 501182 158.7 1842 28 24 32.03 36 46 41.65 47.73 54.36 63 25 73 11 3470 9835 133 3 1819 2128 29.53 33.67 38.55 44 31 6111 69.16 68 68 79 96 93.32 1092 160 3 208 3 2457 30.82 35 34 40.71 4708 54.6763.71 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 2 190.7 27293271 33.45 38 79 45 22 62.97 62327364 3735 1040 12411486 2146 3121 3772 34.78 40 57 47 68 66.08 66 44 79.06 94.46 113.3 1363 1645 2413 366,84347 48.896040 75.40 9503 1208 164 1996 2591 337 9 4426 767 11,342 1,779 64.46 34.58 1128 1527 2093 290 3 4065 573,88151 1164 2.400 4,995 7213 period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 Period 40 Period 50