Gilpin Manufacturing, Inc. has a manufacturing machine that needs attention.

View the additional information.

View the net cash flows.

Gilpin Manufacturing. Inc. uses straight$-$line depreciation and requires an annual return of $14\%.$

Read the requirements.

View the Present Value of $$1$ table.

View the Future Value of $$1$ table.

View the Present Value of Ordinary Annuity of $$1$ table.

View the Future Value of Ordinary Annuity of $$1$ table.

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$).$

$\backslash$table$[[$Year$,\backslash$table$[[$Net Cash Outflows$],[$Amount Invested$]],$Net Cash Inflows$],[$Annual$,$Accumulated$],[\backslash$table$[[0],[1]],2,000,000,,],[,300000,300000],[2,,300000,600000],[3,,300000,900000],[4,,300000,1200000],[5,,300000,1500000],[6,,300000,1800000],[,300000,2100000],[8,,300000,2400000$

Gilpin Manufacturing, Inc. has a manufacturing machine that needs attention.

View the additional information.

View the net gpsh flows.

Gilpin Manufacturing. Inc. uses straight$-$line depreciation and requires aR inual return of $14\%.$

Read the requirements.

View the Present Value of $$1$ table.

View the Future Value of $$1$ table.

View the Present Value of Ordinary Annuity of $$1$ table.

View the Future Value of Ordinary Annuity of $$1$ table.

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$).$

$\backslash$table$[[$Year$,\backslash$table$[[$Net Cash Outflows$],[$Amount Invested$]],$Net Cash Inflows$],[$Annual$,$Accumulated$],[0,2,000,000,,],[1,,,],[2,,,],[3,,,],[4,,,],[5,,,],[6,,,],[\backslash$table$[[7,]],,,],[8,,,]]$

Net Cash Flows

Gilpin Manufacturing. Inc. expects the following net cash inflows from the two options:

$\backslash$table$[[$Year$,,\backslash$table$[[$Current$],[$chine$]],\backslash$table$[[$Purchase New$],[$Machine$]]],[$Year $1,$$$,340\mathrm{.}000$ $$,2\mathrm{.}760\mathrm{.}000],[$Year $2,,780,000,860\mathrm{.}000],[$Year $3,,580,000,660\mathrm{.}000],[$Year $4,,380\mathrm{.}000,460,000],[$Year $5,,180,000,260\mathrm{.}000],[$Year $6,,180\mathrm{.}000,260\mathrm{.}000],[$Year $7,,180\mathrm{.}000,260\mathrm{.}000],[$Year $8,,180\mathrm{.}000,260,000],[$Year $9,,,260\mathrm{.}000],[$Year $10,,,260\mathrm{.}000],[$Total$,$s$,2,800\mathrm{.}000s,6,300,000$et Cash Flows

$\backslash$table$[[\backslash$table$[[$Gilpin Manufacturing. Inc. expects the following net$],[$cash inflows from the two options:$]]],[$Year$,,\backslash$table$[[$sh Current$],[$chine$]],\backslash$table$[[$Purchase New$],[$Machine$]]],[$Year $1,$S$,340\mathrm{.}000$ $$,2,760,000$