Kenneth Clark is evaluating two new business opportunities. Each of the opportunities shown below has a 15-year life. Kenneth uses a 12% discount rate. Option 1 Option 2 Equipment purchase and installation $72.000 $83,270 528,800 $30,860 Annual cash flow $4,620 Equipment overhaul in year 6 Equipment overhaul in year 8 $5.990 Click here to view the factor table. (a) Calculate the net present value of the two opportunities. (Round present value factor calculations to 4 decimal places, e.g. 1.2514 and the final answers to 0 decimal places, e.g. 59.991.) Option 2 Option 1 Equipment overhaul in year 6 Equipment overhaul in year 8 $4,620 $5,990 Click here to view the factor table. (a) Calculate the net present value of the two opportunities. (Round present value factor calculations to 4 decimal places, eg, 1.2514 and the final answers to 0 decimal places, c.8. 59,991.) Option 1 Option 2 Net present value $ Textbook and Media (b) Calculate the profitability index of the two opportunities. (Round answers to 2 decimal plac Option 1 Option 2 Profitability Index eTextbook and Media Atte! Save for Later (c) aalay APPENDIX 9.1 Present value of $1 received in n periods. Periods 4% 5% 6% 7% 8% 9% 10% 1 2 3 4 0.9615 0.9246 0.8890 0.8548 0.8219 0.9524 0.9070 0.8638 0.8227 0.7835 0.9434 0.8900 0.8396 0.7921 0.7473 0.9346 0.8734 0.8163 0.7629 0.7130 0.9259 0.8573 0.7938 0.7350 0.6806 0.9174 0.8417 0.7722 0,7084 0.6499 0.9091 0.8264 0.7513 0,6830 0.6209 11% 12% 13% 14% 16% 15% 20% 0.9009 0,8929 0850 0.8772 0.8621 0.847508333 0.8116 0.7972 0.7831 0.7695 0.7432 0.7182 0.6914 0.7312 07118 0.6931 0.6750 0.6407 0.6086 0.5787 0.6587 0,6355 0.6133 0.5921 0.5523 0.5158 0.4823 0.5935 0.5674 05428 0.5194 0.4761 04371 0.4019 6 7 8 9 10 0.7903 0.7599 0.7307 0.7026 0.6756 0.7462 0.7107 0.6768 0.6446 0.6139 0.2050 0.6651 0.6274 0.5919 0.5584 0.6663 0.6227 0.5820 0.5439 0.5083 0.6302 0.5835 0.5403 0.5002 0.4632 0.5963 0.5470 0.5019 0.4604 04224 0.5645 0.5132 0.4665 0.4241 0.3855 0.5346 0.5066 0.4803 0.4556 0.4104 0.3704 0.3349 0.4817 0.4523 0.4251 0.3996 0.353803139 0.2791 0.4339 0.4039 0.3762 0.3506 0.3050 0.2660 0.2326 0.3909 0.3505 0.3329 0.3075 0.2630 02255 0.1938 0.3522 0.3220 0.2946 0.2697 0.2267 0.1911 0.1615 11 12 13 14 15 0.6496 0.6246 0.6006 0.5775 0.5553 0.5847 0.5568 0.5303 0.5051 0.4810 0.5268 0.4970 0.4688 0.4423 0.4173 0.4751 0.4440 0.4150 0.3878 0.3624 0.4289 0.3971 0.3677 0.3405 0.3152 0.3875 0.3555 0.3262 0.2992 0.2745 0.3505 0.3173 0.2875 0.2607 0.2366 0.1954 0.1619 0.1346 03186 0.2858 0.2567 0.2307 0.2076 0.1685 0.1372 0.1122 0.2897 0.2575 0.2292 0.2042 0.1821 0.1452 0.1163 0.0935 0.2633 0.2320 0.20-46 0:1807 0.1597 0.1252 0.0985 0.0779 0.2394 0.2090 0.1827 0.1999 0.1401 0.1079 0.0335 0.0649 0.4581 04363 0.4155 0.3957 0.3769 16 0.5339 17 0.5134 18 0.4936 19 0.4746 20 0.4564 $1 PV = (1+1) 0.3936 0.3714 0.3503 0.3305 0.3118 0.3387 0.3166 0.2959 0.2765 0.2584 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.0930 0.0208 0.0541 012703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.0802 0.0600 0,0451 0.2502 0.2120 0.1799 0.1528 0.1.300 0.1108 0.0946 0.0691 0.0508 0.0376 0.2317 0.1945 0.1635 0.1377 0.1161 0.0981 0.0829 0.0596 0.0431 0.0313 0.2145 0.1784 0.1486 0.1240 0.1037 0.0868 0.072800514 0.0365 0.0261 APPENDIX 9.2 Present value of an annuity of Si per period. Periods 676 1 2 3 4 5 4% 0.9615 1.8861 2.7751 3.6299 4.4518 5% 0.9524 1.8594 2.7232 3.5460 4.3295 0.9434 1.8334 2.6730 3.4651 42124 7% 8% 9% 10% 0.9346 0.9259 0.9174 0.9091 1.8080 1.7833 1.7591 1.7355 2.6243 2.5771 2.5313 2.4868 3.3872 3.3121 3.2397 3.1698 4.1002 3.99273.8897 3.7907 11% 12% 0.900908929 1.7125 1.6901 2.4437 2.4018 3.1024 3.0373 3.6959 3,6048 13% 145 16% 18 20% 0.8850 0.8772 08621 0.8475 0.8333 1.6681 1.646716052 1.5656 1.5278 2.3612 2.3216 2.2459 2.1743 21065 29745 2.9137 2.2982 26901 2.5887 3.5172 3.4331 3.2743 3.1272 2.990% 6 7 8 9 10 5.2421 6.0021 6.7327 7.4353 8.1109 5.0757 5.7864 6.4632 7.1078 7.7217 4.9173 5.5824 6.2098 6.8017 7.3601 4.7665 4.6229 44859 4.3553 5.3893 5.2064 5.03304.8684 5.9713 5.7466 5.5348 5.3349 6.5152 6.2469 S.995) 5.7590 7.0236 6.7101 6.4177 6.1446 4.2305 4.1114 3.9925 3.8887 3.6847 3.4976 3:3255 4.7122 4.5638 4.4226 4.2883 40296 3.8115 3.6046 5.1461 4.9676 4.7988 4.638944436 4.0776 3.8372 5.5370 5.3282 51317 4.9464 4.6065 4.3030 4.0310 5.8892 5.6502 54262 5.2161 4.8332 44941 4.1925 11 12 13 14 15 8.7605 9.3851 9.9856 10.5631 11.1184 8.3064 8.8633 9.3936 9.8986 10.3797 7.8869 8.3838 8.8527 9.2950 9.7122 7.49877.13906.8052 6.4951 6.2065 5.9377 5.6869 5.4527 5.0286 4,6560 43271 7.9427 7.5361 7.1607 6.8137 6.4924 6.1964 5.9176 56603 5.1971 4.7932 44392 8.3577 7.9038 74869 7.1034 6.7499 6.4235 6.1218 5.8424 52423 49095 4.5327 8.74558.2442 7.78627.3667 6.9819 6.6282 6.3025 6,0021 54675 5.0081 4.6106 7.1909 9.1079 8.5595 8.0607 7.6061 68109 4.6755 6.4624 6.1422 5.5755 5:0916 7.3792 69740 6.6039 6.2651 5.66855162447296 7.5458 7.11966.7291 6.3729 5.7487 52223 4.7746 7.7016 7.2497 6,8399 6.4674 5.8178 5.2732 4.8122 7.8393 73658 6,9380 6.5504 5.8775 53162 4.5435 7.9633 74694 7,0348 6,6231 59288 53527 4.8696 16 11.6523 10.8378 10.1059 9.4466 88514 8.3126 7.8237 17 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 18 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 19 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3659 20 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 1 $1- (1 + )" PVA =