More info - X Data table The company is considering two options. Option 1 is to refurbish the current machine at a cost of $1,200,000. If refurbished. Alton expects the machine to last another eight years and then have no residual value. Option 2 is to replace the machine at a cost of $2,000,000. A new machine would last 10 years and have no residual value. Year Print Done Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Refurbish Current Purchase New Machine Machine $ 900,000 $ 160,000 330.000 590.000 260.000 520,000 190.000 450,000 120,000 380,000 120,000 380,000 120,000 380,000 120.000 380,000 380,000 380,000 Requirements Year 8 Year 9 Year 10 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. 2. Which option should Alton choose? Why? 2,160,000 $ 4,000,000 Total Print Done Print Done Compute the NPV for each of the options. Begin with Option 1 (refurbish). (Enter the factors to three decimal places. X.XXX. Use parentheses or a minus sign for a negative net present value.) Net Cash PV Factor Present Years Inflow (i = 10%) Value 1 900,000 2 330,000 3 260,000 Present value of each year's inflow: (n = 1) (n = 2) (n = 3) (n = 4) (n = 5) (n = 6) (n = 7) 4 190,000 5 120,000 6 120,000 7 120,000 8 (n = 8) 120,000 Total PV of cash inflows 0 Initial investment Net present value of the project