need help solving how to comput the ARR & the rest of the steps please

E Homework: Ch 11 HW Problem Question 1, PM11-32A (s... Part 5 of 9 (Click the Gammon Manufacturing, Inc. has a manufacturing machine that needs attention. (Click the icon to view additional information) Gammon expects the following net cash inflows from the two options: E (Click the icon to view the net cash flows.) Gammon uses straight-line depreciation and requires an annual return of 14%. (Click the (Click the . (Click the Read the requiremer 10 4UUUUU 5,700,000 (Round your answer to one decimal place.) The payback for Option 2 (purchase new machine) is 5.3 years 11 Average amount invested ARR Compute the ARR (accounting rate of retum) for each of the options. Average annual operating income Refurbish 2600000 Purchase 3800000 11 99 Choose from any list or enter any number in the input fields and then click Check Answer. Help Me Solve This e Text Pages Get More Help Present Value of Ordinary Annuity of S1 Periods 1% 2% 3% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 09520.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 1.970 1.942 1.9131886 1.859 1.8331.808 1.783 1.759 1.736 1.6901.647 1.626 1.6051.566 1.528 Parlod 3 2.9412.88428292775 2.723 2.673 2624 2577 2531 2.487 2.40223222.283 2.246 2174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.4653387 3.312 3.240 3.170 3.037 29142856 2798 2690 2589 Period 5 4.8534.713 4.580 4.452 4.3294212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 Period 6 5.795 5601 5.417 5242 5.076 4917 4.767 4.623 4.4864.355 4.111 3.889 3.784 3.6853498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5206 5.033 4.86845644288 4.16040393.812 3.605 Period 8 7.65273257.020 6.733 6.463 62105971 5.7475.535 533549684.6394.487 4.344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6247 5.9955.750 5.32849464.7724.60743034,031 Period 10 9.471 8.9838.530 8.111 7.722 7.360 7.024 | 6.710 6.418 6.145 5.6505216 5.019 4833 4.494 4.192 Period 11 10.3689.7879.253 8.760 8.306 7.8877499 7.139 6.805 6.495 5.938 5.4535.234 5.0294656 4.327 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7943 7536 7.1616.814 6.1945.660 5.421 5.1974.793 4.439 Period 13 12.134 11.348 10.6359.986 9.394 8.853 8.358 7.904 7.487 7.103 6.42458425583 5.342 | 4.910 4.533 Period 14 13.00412106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.3676.628 6.002 5.724 5.468 5.008 4.611 Period 15 13,86512849 11.938 11.118 10.380 9.712 9.108 8.559 8.0617.606 6,811 6.142 5.8475.575 5.092 4.675 Period 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.9746.265 5954 5.669 5.1624.730 Period 17 15.562 14 292 13.166 12.166 11.274 10.477 9.763 9.1228.5448.022 7.120 6373 6.047 5.749 5222 4.775 Period 18 16.398 14.992 13.754 12659 11.690 10.828 10.0699.372 8.75682017250 6.4676.128 58185273 4812 Period 19 17 225 15,678 14.32413.134 12.085 11.158 10.336 9.604 8.950 8.3657366 6.550 6.1985.87753164844 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 10.5949.818 9.1298.51474696.623 6.259 5.929 5.353 4.870 Period 21 18.857 17.011 15.415 14.029 12.821|11.764 10.836 10.017 9.292 8.64975626.6876.3125.973 5.3844891 Period 22 19.660 17.658 15.93714451 13.163 12.042 11.061 10.2019.442 8.7727.645 6.7436.3596.0115.410 4.909 Period 23 20.456 18 292 16.444 14.857 13.489 12 303 11.272 10.371 9.5808.8837.718 6.792 6.399 6.044 54324925 Period 24 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.5857.784 6.835 6.434 6.073 5.451 4.937 Period 25 22.023 19.5231741315.622 14.094 12783 11.654 10.675 9.8239.077 7.8436.8736.464 6.097 5.467 4948 Period 26 22.795 20.12117.87715983 14.375 13.003) 11.826 10.8109 929 9.1617.896 6.906 6.491 6.118 5.480 4956 Period 27 23.560 20707 18.32716.330 14.64313 211 11.987 10.935 10.027 92377943 6.935 6.514 6.1365492 4.964 Period 28 24.3162128118.764 16.663 14.898 13.406 12.137 11.051 10.116 9.3077.984 6.961 6534 6.1525.502 4.970 Period 29 25.066 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.1989.370 8.022 6.9836.551 6.166 5510 4.975 Period 30 25.80822396 19,600 17.292 15.372 13.765 12.409 11.258 10 274 9.4278.0567.003 6.566 6.1775.517 4979 Period 40 32 835 27355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.7798244 7.105 6.642 6233 5.5484997 Period 50 39.196 31424 25.730 21.482 18.256 15.762 13.801 12 233 10.962 9.915 8.304 7.133 6.6616.246 5.5544999 10% Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Perlod 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Period 20 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 Period 40 Period 50 Future Value of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 12% 14% 15% 1.010 1.020 1.030 1.040 1.050 1.060 1.070 1.080 1.090 1.100 1.120 1.140 1.150 1.020 1.040 1.061 1.0821.103 1.1241.145 1.166 1.1881.210 1254 1.300 1.323 1.030 1.061 1.093 1.125 1.158 1.191 1.225 1.260 1.295 1.331 1.405 1.482 1.521 1.041 1.0821.126 1.17012161.262 1311 1.360 1.4121.464 1.574 1.689 1.749 1.051 1.104 1.159 1217 1.276 1.338 1.403 1.469 1.539 1.611 1.762 1.925 2011 1.062 1.126 1.194 1.265 1.340 1.419 1.501 1.587 1.6771.772 1.974 2.1952313 1.072 1.149 1.230 1.316 1.407 1.504 1.606 1.7141.8281.949 2211 2502 2.660 1.083 1.1721.267 1.369 1.4771.594 1.718 1.851 1.993 2.1442476 28533059 1.094 1.1951.305 1.423 1.551 1.689 1.838 1.999 2.1722 358 277332523518 1.105 1.219 1.344 1.480 1.629 1.791 1.967 2 159 2.367 2 594 3.106 3.707 4.046 1.116 1.243 1.3841.539 1.710 1.898 2.105 2332 2.580 2853 3.479 4.226 4652 1.127 1.268 1.426 1.601 1.796 2.012 2252 2518 2.8133.138 3.896 4.818 5350 1.138 1.294 1.469 1.665 1.886 2.133 2.410 2.720 3.066 3.452 4.363 5.492 6.153 1.149 1.319 1.513 1.732 1.980 2.261 2.5792937 3.342 3.798 4.887 6.2617076 1.161 1.346 1.558 1.801 2.079 2397 2.750 3.172 3.642 4.1775,474 7.1388.137 1.173 1.373 1.605 1.873 2.183 2.54029523.426 3.970 4.595 6.130 8.1379.358 1.184 1.400 1.653 1.948 2.2922.693 3.1593.700 4.3285.0546.866 9.276 10,76 1.196 1428 1.702 2.026 2407 2.854 3.380 3.996 4.717 5.560 7.690 10.58 12.38 1.208 1.4571754 2.107 2.527 3.026 3.6174.316 5.1426.116 8.613 12.06 14.23 1.220 1.486 1 806 2.191 2.653 3.207 3.870 4.661 5.6046.727 9.646 13.74 16.37 1.232 1.516 1.860 2279 2.786 3.400 4.1415.034 6.1097.400 10.80 15.67 18.82 1.245 1546 1.916 2370 2.925 3.604 4430 5.4376.659 8.140 12.10 17.86 21.64 1.2571.5771.9742.465 3.072 3.820 4.741 5.871 | 72588.954 13.55 20.36 24.89 1.270 1.608 2.033 2,5633 225 4.049 5.072 6.3417.911 9.850 15.18 23 21 28.63 1.282 1.641 2.094 2.666 3.386 4.292 5.4276.848 8.623 10.83 17.00 26.46 32.92 1.295 1.673 2.157 2.772 3.556 4.549 5.8077.3969.399 11.92 19.04 30.1737 86 1.308 1.707 2 221 2883 3.733 4.822 6.214 7.988 10.25 13.11 21 32 34.3943.54 1321 1.741 2288 2.999 3.920 5.112 6.649 8.627 11.17 4.4 23.88 3920 50 1.335 1.776 2357 3.119 4.116 5.418 7.1149.317 121715.86 26.75 44.69 57.58 1.348 1.811 2.427 3.243 43225.743 7.612 10.06 13.27 17.45 29.96 50.95 66.21 1.48922083 262 4.801 7.040 10.29 14.9721.72 3141 | 45.26 93.05 1889 267.9 1.645269243847.107 11.47 18.42 29.46 46 907436 1174 289.0 700 2 1,084 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Period 20 Future Value of Ordinary Annuity of 51 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2010 2020 2030 2040 2050 2060 2.070 2.080 2.090 2.100 2.120 2.140 2.150 3.0303.060 3.091 3.122 3.153 3.1843.215 3.246 3.278 3.310 3.374 3.440 3.473 4.060 4.122 4.1844.2464.310 4.375 4.440 4.5064.573 4.641 4.779 4 921 4.993 5.101 5.204 5.309 5.416 5.526 5.637 5.751 5.8675.985 6.105 6.353 6.610 6.742 6.152 6.308 6.468 6.633 6.802 6.975 7.1537.3367.523 7.7168.115 8.536 8.754 7.214 7.434 76627.898 8.142 8.394 8.6548.9239.2009.487 10.09 10.73 11.07 8.286 8.5838.8929.214 9.549 9.897 10.260 10.64 11.03 11.44 12.30 13.23 13.73 9.369 9.755 10.16 10.58 | 11.03 11.49 11.98 12.49 13.02 13.58 14.78 16.09 16.79 10.46 10.95 11.46 12.01 12.58 13.18 13.82 14 49 15.1915 94 17.55 19.34 20.30 11.57 12.17 12.8113.49 1421 14.97 15.78 16.65 17.56 18.53 20.65 23.0424.35 12 68 13.41 14.19 15.03 15.92 16.87 17.8918.98 20.14 21.38 24.13 27 2729.00 13.81 14.68 15,62 16.63 17.71 18.88 20.14 21.50 22.95 24.52 28.03 32.09 34 35 14.95 15.97 17.09 18.29 19.60 21.0222 55 24.21 26.02 27.98 3239 37.58 40.50 16.10 17.29 18.60 20.02 21.58 23.28 25.13 27.15 29.3631.77 37.28 43.84 47.58 17.26 18.64 20.16 21.82 23.66 25.67 27 89 30.32 33.00 3595 42.75 50.98 55.72 18.43 20.01 21.76 23.70 25,84 28.21 30.84 33.75 36.97 40.54 48.8859.12 65.08 19.61 21.41 23.41 25.65 28.13 30.91 34.00 37.4541.30 45.60 55.75 68.39 75.84 20.81 2284 25.12 2767 30.54 33.76 37 38 41.45 | 46.02 51.16 63.44 78.9788.21 22.02 24.30 26.87 29.7833.07 36.79 41.00 45.7651.16572872.05 91.02 102.4 23 24 25.7828.68 31.9735.72 39.99 44.87 50.42 56.76 64.00 81.70 104.8 118.8 24.47 27.30 30.543425 38.51 43.39 49.01 55.466287714092 50 120.4 137.6 25.72 28.85 32.45 36.62414347.00 53.44 60.89 69.5379.54 104.6 138.3 1593 26.97 30.42 34.43 39.08 44.50 50.82 58.18 66.76 76.7988.50 118.2158.71842 28.24 32.03 36.46 41.65 47.73 54.86 63.25 73.11 84.70 98.35 133.3 181.92128 29.53 33 67 | 38.55 44.3151.11 59.16 68.68 79.95 93.32 1092 150.3 208.3 245.7 30.82 35.3440.71 47.08 54.6763.7174.48 87 35 1027 121.1 169.4 238.5 283.6 32.13 37.05 42.93 49.97 58.40 68.5380.70 95,34 113.0134 2190.7 2729327.1 33.45 38.794522 52.97 6232 73.64 87 35 104.0 124.1148.6 214.6 312.1 3772 34.78 40.57 47.58 56.08 66.44 79.06 94.46 113.3136.3 164.5 241.3356.8 434.7 48.89 60.40 75.40 95.03 1208 154.8 199.6 259.1 337.94426767.1 1,3421.779 64.46 84.58 1128 152.7 209.3 290.3 406.5 573.8 815,1 1,164 2,400 4,995 7.218 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 Perlod 40 Period 50 Present Value of $1 Periods 15 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0 952 0.943 0.935 0.926 0.917 0.9090.893 0877 0.870 0.862 0.8470.833 Period 2 0.980 0.961 0943 0.925 0.9070.890 0.873 0.857 0.8420826 0.797 0.769 0.7560743 0.7180.694 Period 3 09710.942 0915 0.8890.864 0.840 0.816 0.7940.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 Period 4 0.961 0.9240888 0.855 0.8230.792 0.763 0.735 0.708 0.683 0.636 0.592 0.572 0.5520.516 0.482 Period 5 0.951 0.906 0 863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.497 0.4760437 0.402 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.6660.630 0.596 0.564 0.507 0.456 0.432 0.410 0.3700335 Period 7 0.933 0.871 0.813 0.750 0.7110.665 0.623 0.5830.547 0 513 0.452 0.400 0.376 0.354 0.3140 279 Period 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.4040.351 0.327 0.305 0 266 0233 Period 9 0.914 0.837 0.766 0.7030645 0.5920.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0225 0.194 Period 10 10.905 0.820 0.744 0.676 0.614 0.558 0 508 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.19 0.162 Period 11 0.8960 B040.722 0.650 0.586 0.527 0.475 0.429 0.388 0.350 0.287 02370215 0.1950.162 0.135 Period 12 0.887 0.788 0.701 0.625 0.557 0.4970.444 0.397 0.356 0.319 0.25702080.187 0.168 0.1370.112 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 Period 14 0.8700.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.2390.183 0.140 0.123 0.108 0.0840065 Period 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.2520218 0.163 0.123 0.1070.093 0.071 0.054 Period 17 0.844 0.714 0.505 0.513 0.436 0.371 0.317 0.270 0.231 0.1980.146 0.108 0.093 0.080 0.060 0.045 Period 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.1300.095 0.081 0.069 0.051 0.038 Period 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.1940.164 0.116 0.083 0.070 | 0.060 0.043 0.031 Period 20 0.8200.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 Period 21 0.811 0.660 0.538 0.439 0.359 0.294 0.2420.1990.1640.135 0.093 0.064 0.053 0.044 0.031 0.022 Period 22 0.803 0.647 0.522 0.422 0.342 0.278 0226 0.184 0.150 0.123 0.083 0.056 0.046 0.038 0.026 0.018 Period 23 0.795 0.634 0.507 0.4060.3260.262 0.211 0.170 0.138 0.112 0.074 0.049 0040 0.033 0.022 0.015 Period 24 0.788 0.622 0.492 0.390 0.310 0.247 0.197 0.158 0.126 0.1020.066 0.043 0.035 0.028 0.019 0.013 Period 25 0.780 0.610 0.478 0.375 0.296 0 233 0.184 0.146 0.116 0.092 0.0590.038 0.030 0.024 0.0160.010 Perlod 26 0.772 0.598 0.464 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.053 0.033 0.026 0.021 0.014 0.009 Period 27 0.764 0.586 0.450 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.047 0.029 0.023 0.018 0.0110.007 Period 28 0.757 0.574 0.437 0.333 0256 0.1960.150 0.116 0.090 0.069 0.042 0.025 0.0200.016 0.010 0.006 Period 29 0.7490.563 0.424 0.321 0243 0.185 0.141 0.107 0.082 0.063 0.037 0.022 0.017 | 0.014 0.008 0.005 Period 30 0.742 0.5520412 0.308 0231 0.1740.131 0.099 0.075 0.057 0.033 0.0200.015 0.012 0.007 0.004 Period 40 0.672 0453 0.3070208 0.142 0.097 0.067 0.046 0.032 0.022 0.0110.005 0.0040.003 0.001 0.001 Period 50 0.608 0.372 0228 0.141 0.087 0.054 0.034 0.021 0.013 0.0090.003 0.001 0.001 0.001 Refurbish Current Machine Year Purchase New Machine Year 1 $ 1,600,000 $ 1,320,000 Year 2 570,000 440,000 790.000 660,000 Year 3 Year 4 530,000 310,000 180,000 Year 5 Year 6 180,000 Year 7 180,000 400,000 400,000 400,000 400,000 400,000 400,000 Year 8 180,000 Year 9 Year 10 3,640,000 $ 5,700,000 Total Part 1 of 9 Score: 0 of 8 needs attention. (Click the icon to view Present Value of $1 cions: Click the icon to view Present Value of Om $11 Requirements Ordi 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. 2. Which option should Gammon choose? Why? Print Done me that needs attention. (Click the icon to view Present Value of (Click the icon to view Present Value o - More Info xls 10 The company is considering two options. Option 1 is to refurbish the current machine at a cost of $2,600,000. If refurbished, Gammon 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 $3,800,000. A new machine would last 10 years and have no residual value. Print Done ck