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Please only answer part A for both questions Calculator Print Item Assume a company is going to make an investment of $455,000 in a machine

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Please only answer part A for both questions

Calculator Print Item Assume a company is going to make an investment of $455,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Option A, Option B, Product A Product B $190,000 $145,000 195,000 185,000 60,000 60,000 20,000 75,000 A. Calculate the payback period of each product. Round your answers to 2 decimal places. Option A, Product A 3.14 X years Option B, Product B years B. Which of the two options would you choose based on the payback method? Option A, Product A Feedback Check My Work The initial investment will be offset by the cash flows for each year. Continue until the initial investment is depleted to determine the total payback period. Pompeii's Pizza has a delivery car that it uses for pizza deliveries. The transmission needs to be replaced and there are several other repairs that need to be done. The car is nearing the end of its life, so the options are to either overhaul the car or replace it with a new car. Pompeii's has put together the following budgetary items: Present Car New Car Purchase cost new $30,000 Transmission and other repairs $8,000 Annual cash operating cost 12,000 11,000 Fair market value now 6,000 Fair market value in five years 500 6,000 If Pompeii's replaces the transmission of the pizza delivery vehicle, they expect to be able to use the vehicle for another 5 years. If they sell the old vehicle and purchase a new vehicle, they will use that vehicle for 5 years and then trade it in for another new pizza delivery vehicle. If they trade for the new delivery vehicle, their operating expenses will decrease because the new vehicle is more gas efficient and the maintenance on a new car is less. This project is analyzed using a discount rate of 15%. (Click here to see present value and future value tables) A. Calculate the NPV on both Cars. Round your present value factor to three decimal places and the rest to nearest dollar. Present Car $ 47,976 x New Car 57,890 B. What should Pompeii's do? Pompeii's should retain the present car Feedback

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