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Brooks Clinic is considering investing in a new heart monitoring equipment . It has two Options A which is a lower initial investment but would

Brooks Clinic is considering investing in a new heart monitoring equipment .  It has two Options A which is a lower initial investment but would be a significant expenditure for rebuilding after 4 years.  Option B would require no rebuilding but maintain costs are higher.  Since Option B machine is of initial higher quality, it is expected to have a salvage value at the end of its useful life.  The following estimates were made of the cash flows.  The cost of the company's capital is 6%

Info.                                                Option A.    Option B

Initial cost                                      $183,000    $267,000

Annual Cash Inflow                      $72,800       $80,300

Annual Cash Outflow                   $29,200       $26,200

Cost To Rebuild. (end of yr 4).   $51,800        $0

Salvage Value.                                    0.           $7,000

Estimate useful life                        7 yrs.          7 yrs.


I need to compute the net present value, profitability index, and internal rate of return for each option.  *If net value if negative I need to put parenthesis around it and present value and internal rate are round to zero decals, profitability index is rounded 2 decimal places.

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