Machining Center Methods Option 1 Option 2 Option 3 Investment Machine-tool purchase $231,000 $231,000 $231,000 Automatic pallet changer $43,800 $43,800 Installation $30,000 $35,000 $35,000 Tooling expense $58,000 $60,000 $60,000 Total investment $319,000 $369,800 $369,800 Proceeds from sales of broken machines $50,000 $50,000 $50,000 Machining Center Methods Option 1 Option 2 Option 3 Net investment cost $269,000 $319,800 $319,800 Annual net savings: Direct labor Setup Total savings $61,800 $68,800 $71,800 $19,700 $19,700 $26,500 $81,500 $88,500 $98,300 Useful life Salvage value 5 years $100,000 5 years 5 years $120,000 $120,000 All savings figures include any tax effects. Once a method is chosen, BC expects to operate the machining centers over the next 5 years. Which option would be select- ed based on the use of the NPW measure at i = 12%?