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IVanhoe Clinic is considering irwesting in new heart-monitoring equiprnent It has two options. Ontion A would have an initaal lower cost but would require a

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IVanhoe Clinic is considering irwesting in new heart-monitoring equiprnent It has two options. Ontion A would have an initaal lower cost but would require a significant expenditure for rebulding after 4 years. Option B would require no rebuldins expenditure, but its maintenance costs would be higher. Since the 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 company's cost of capital is 7x. Clicktere to view the factor tabin. (a) Compute the (1) nat present value, (2) profitabilityindek, and (3) internal rate of return for each obtion. Oilet To iolve far interna/ ratic of return experiment with alternative disoount rates to arrive at a net present value of zerol nif ther net prosit watie in decimal places, es. 125 and mund profitability index to 2 decimal ploses, 41,1250 for caiculation purposet, use 5 decinet piuces or: Compute the (1) net present value, (2) profitability index; and (3) internal rate of return for each option. (Hint. To solve for internal rate of return, experiment with alternative discount rates to arrive at a net present value of zero) (if the net present vilue is negative, use elther a negatlve sign preceding the number eg 45 or parentheses 43 (45). Round answers for precent value and iRR to 0 decinal places, eg. 125 and round profitability index to 2 decimal places, eg. 1250. Far calculation purposes, use 5 decinsof ploces as displayed in the foctor table provided). eTextbook and Media Attempts; 0 of 3 used (b) The parts of this question must be complated if ordeg Thespart whil be arvailable when vou complete the part abowe. IVanhoe Clinic is considering irwesting in new heart-monitoring equiprnent It has two options. Ontion A would have an initaal lower cost but would require a significant expenditure for rebulding after 4 years. Option B would require no rebuldins expenditure, but its maintenance costs would be higher. Since the 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 company's cost of capital is 7x. Clicktere to view the factor tabin. (a) Compute the (1) nat present value, (2) profitabilityindek, and (3) internal rate of return for each obtion. Oilet To iolve far interna/ ratic of return experiment with alternative disoount rates to arrive at a net present value of zerol nif ther net prosit watie in decimal places, es. 125 and mund profitability index to 2 decimal ploses, 41,1250 for caiculation purposet, use 5 decinet piuces or: Compute the (1) net present value, (2) profitability index; and (3) internal rate of return for each option. (Hint. To solve for internal rate of return, experiment with alternative discount rates to arrive at a net present value of zero) (if the net present vilue is negative, use elther a negatlve sign preceding the number eg 45 or parentheses 43 (45). Round answers for precent value and iRR to 0 decinal places, eg. 125 and round profitability index to 2 decimal places, eg. 1250. Far calculation purposes, use 5 decinsof ploces as displayed in the foctor table provided). eTextbook and Media Attempts; 0 of 3 used (b) The parts of this question must be complated if ordeg Thespart whil be arvailable when vou complete the part abowe

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