Kimmel, Accounting, 6e Help I System Announcements CALCULATOR??pRINTER VERSIONI : 4EACK Brooks Clinic is considering investing in new heart-m oring equipment. It has two options. Option A would have an initial cost but would require a significant expenditure for rlding after 4 years. Option B would require no rebuilding 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 6% Initial cost Annual cash inflows Annual cash outflows Cost to rebuild (end of year 4) Salvage value Estimated useful life Option A Option B $181,000 $283,000 $73,000 $82,400 $30,200 $25,100 $0 $0 $8,300 7 years7 years $48,000 Compute the (1) net present value, (2) profitability index, and (3) internal rate of return for each option. (Hint: To internal rate of return, experiment with alternative discount rates to arrive at a net present value of zero.) (If the value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). Round anwers for present value and IRR to 0 decimal places, e.g. 125 and round profitability index to 2 decimal places, eg10.50 For calculation purposes, use 5 decimal places as displayed in the factor table provided.)