Present Value of $1 Present Value of Ordinary Annuity of $1 Future Value of $1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 12% & 14% & 15% \\ \hline Period 1 & 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 \\ Period 2 & 1.020 & 1.040 & 1.061 & 1.082 & 1.103 & 1.124 & 1.145 & 1.166 & 1.188 & 1.210 & 1.254 & 1.300 & 1.323 \\ Period 3 & 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 \\ Period 4 & 1.041 & 1.082 & 1.126 & 1.170 & 1.216 & 1.262 & 1.311 & 1.360 & 1.412 & 1.464 & 1.574 & 1.689 & 1.749 \\ Period 5 & 1.051 & 1.104 & 1.159 & 1.217 & 1.276 & 1.338 & 1.403 & 1.469 & 1.539 & 1.611 & 1.762 & 1.925 & 2.011 \\ Period 6 & 1.062 & 1.126 & 1.194 & 1.265 & 1.340 & 1.419 & 1.501 & 1.587 & 1.677 & 1.772 & 1.974 & 2.195 & 2.313 \\ Period 7 & 1.072 & 1.149 & 1.230 & 1.316 & 1.407 & 1.504 & 1.606 & 1.714 & 1.828 & 1.949 & 2.211 & 2.502 & 2.660 \\ Period 8 & 1.083 & 1.172 & 1.267 & 1.369 & 1.477 & 1.594 & 1.718 & 1.8551 & 1.993 & 2.144 & 2.476 & 2.853 & 3.059 \\ Period 9 & 1.094 & 1.195 & 1.305 & 1.423 & 1.551 & 1.689 & 1.838 & 1.999 & 2.172 & 2.358 & 2.773 & 3.252 & 3.518 \\ Period 10 & 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 \\ Period 11 & 1.116 & 1.243 & 1.384 & 1.539 & 1.710 & 1.898 & 2.105 & 2.332 & 2.580 & 2.853 & 3.479 & 4.226 & 4.652 \\ Period 12 & 1.127 & 1.268 & 1.426 & 1.601 & 1.796 & 2.012 & 2.252 & 2.518 & 2.813 & 3.138 & 3.896 & 4.818 & 5.350 \\ Period 13 & 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 \\ Period 14 & 1.149 & 1.319 & 1.513 & 1.732 & 1.980 & 2.261 & 2.579 & 2.937 & 3.342 & 3.798 & 4.887 & 6.261 & 7.076 \\ Period 15 & 1.161 & 1.346 & 1.558 & 1.801 & 2.079 & 2.397 & 2.759 & 3.172 & 3.642 & 4.17 \end{tabular} Future Value of Ordinary Annuity of $1 \begin{tabular}{|l|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 12% & 14% & 15% \\ \hline Period 1 & 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 \\ Period 2 & 2.010 & 2.020 & 2.030 & 2.040 & 2.050 & 2.060 & 2.070 & 2.080 & 2.090 & 2.100 & 2.120 & 2.140 & 2.150 \\ Period 3 & 3.030 & 3.060 & 3.091 & 3.122 & 3.153 & 3.184 & 3.215 & 3.246 & 3.278 & 3.310 & 3.374 & 3.440 & 3.473 \\ Period 4 & 4.060 & 4.122 & 4.184 & 4.246 & 4.310 & 4.375 & 4.440 & 4.506 & 4.573 & 4.641 & 4.779 & 4.921 & 4.993 \\ Period 5 & 5.101 & 5.204 & 5.309 & 5.416 & 5.526 & 5.637 & 5.751 & 5.867 & 5.985 & 6.105 & 6.353 & 6.610 & 6.742 \\ Period 6 & 6.152 & 6.308 & 6.468 & 6.633 & 6.802 & 6.975 & 7.153 & 7.336 & 7.523 & 7.716 & 8.115 & 8.536 & 8.754 \\ Period 7 & 7.214 & 7.434 & 7.662 & 7.898 & 8.142 & 8.394 & 8.654 & 8.923 & 9.200 & 9.487 & 10.09 & 10.73 & 11.07 \\ Period 8 & 8.286 & 8.583 & 8.892 & 9.214 & 9.549 & 9.897 & 10.260 & 10.64 & 11.03 & 11.44 & 12.30 & 13.23 & 13.73 \\ Period 9 & 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 \\ Period 10 & 10.46 & 10.95 & 11.46 & 12.01 & 12.58 & 13.18 & 13.82 & 14.49 & 15.19 & 15.94 & 17.55 & 19.34 & 20.30 \\ Period 11 & 11.57 & 12.17 & 12.81 & 13.49 & 14.21 & 14.97 & 15.78 & 16.65 & 17.56 & 18.53 & 20.65 & 23.04 & 24.35 \\ Period 12 & 12.68 & 13.41 & 14.19 & 15.03 & 15.92 & 16.87 & 17.89 & 18.98 & 20.14 & 21.38 & 24.13 & 27.27 & 29.00 \\ Period 13 & 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 \\ Period 14 & 14.95 & 15.97 & 17.09 & 18.29 & 19.60 & 21.02 & 22.55 & 24.21 & 26.02 & 27.98 & 32.39 & 37.58 & 40.50 \\ Period 15 & 16.10 & 17.29 & 18.60 & 20.02 & 21.58 & 23.28 & 25.13 & 27.15 & 29.36 & 31.7 \end{tabular} 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. 2. Which option should Gilpin choose? Why? The company is considering two options. Option 1 is to refurbish the current machine at a cost of $1,100,000. If refurbished, Gilpin 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 $2,200,000. A new machine would last 10 years and have no residual value. Requirement 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. Compute the payback for both options. Begin by completing the payback schedule for Option 1 (refurbish)