Gilpin Manufacturing, Inc. has a manufacturing machine that needs attention. (Click the icon to view additional information.) Gilpin expects the following net cash inflows from the two options: (Click the icon to view the net cash flows.) Gilpin uses straight-line depreciation and requires an annual return of 10% More info The company is considering two options. Option 1 is to refurbish the current machine at a cost of $1,600,000. If refurbished, Gilpin 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 $4,400,000. A new machine would last 10 years and have no residual value. Data table Requirements 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. 2. Which option should Gilpin choose? Why? Reference Reference Reference Reference Future Value of $1 rence Reference Reference 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). Gilpin Manufacturing, Inc. has a manufacturing machine that needs attention (Round your answer to one decimal place) The payback for Option 1 (refurbish current machine) is years Now complete the payback schedule for Option 2 (purchase) pin Manufacturing, Inc. has a manufacturing machine that needs W comnlete the navhack crhariule for Ontinn ? (nurchaca) Gapin Manufacturing, the has a mariufacturing machine that needs abention (Round your answer to nee decimat placer) The paybock for Option 2 (puchlasa new machine) is yeqar Gilpin Manufacturing, Inc. has a manufacturing machine that needs attention. (Click the icon (Round your answer to one decimal place.) The payback for Option 2 (purchase new machine) is years. Compute the ARR (accounting rate of retum) for each of the options. Refurbisi Purchase Compute Corbpute the NPV for each of the options. Bogin wWh Option 1 (ielurbish). (Enter the lactars lo three decimat plachs x Use parentheses of a tuinus algn for a negative net prestit value.) Gilpin Manufacturing, Inc. has a manufacturing machine that needs attention. E IClick the Now compute the NPV for Option 2 (purchase). (Enter the factors to three decimal places XXXX Use parentheses or Now compute the NPY lor Option 2 (purchase) (thnter the factors to three decienal places . Use paentheses or a minus slgn for a negative not present valte ) Gilpin Manufacturing, Inc. has a manufacturing machine that needs attention. Glpin Manulachuring lac has a mannilacturimg alachine that needs attentlan (Click the icon to viow Prosent Value of $1 table) Requirement2. Whict option thould Gilpin choose? Why? Reviow your answem in Regulomant 1 Gilpin should choose because this opton hat a paybock period, an ARR that is the other option: NPV, and its probtabisty inder is Aanufacturing, Inc. has a manufacturing machine that needs attention compute the profitability index for each option. (Round to two decimal
