Hazen Manufacturing, Inc. has a manufacturing machine that needs attention. (Click the icon to view additional information.) Hazen expects the following net cash inflows from the two options: (Click the icon to view the net cash flows.) Hazen uses straight-line depreciation and requires an annual return of 14%. Requirements 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. 2. Which option should Hazen choose? Why? More info The company is considering two options. Option 1 is to refurbish the current machine at a cost of $2,000,000. If refurbished, Hazen 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 $4,000,000. A new machine would last 10 years and have no residual value. Data table Reference Reference Present Value of Ordinarv Annuitv of $1 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). (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). The payback for Option 2 (purchase new machine) is years. Compute the ARR (accounting rate of return) for each of the options. Total PV of cash inflows 0 Initial investment Net present value of the project Now compute the NPV for Option 2 (purchase). (Enter the factors to three decimal places. X.XXX. Use parentheses or a minus sign for a negative net present value.) 678910(n=10)0(n=6)(n=7)(n=8)(n=9)TotalPVofcashinflowsInitialinvestmentNetpresentvalueoftheproject Finally, compute the profitability index for each option. (Round to two decimal places X.XX.) Refurbish Purchase 1=Profitabilityindex== Requirement 2. Which option should Hazen choose? Why? Review your answers in Requirement 1. Hazen should choose payback period, an ARR that is the other option, a NPV, and its profitability index is