Problem 163 Swifty Chnic is considering investing in new heart monitoring eqapment. It has two options Option A would have an initial lower cost but would require a signficant expendture for rebuildng ater d yeers. Option folowng entmatr.eere made of the cash nows The compsny's cost of capital 5%. expenditure, but its maintenance costs wouild be higher Since the Option B machine is of intial higher quslity, it s expected to have a salvage value at the end of ts efl Ite. The Option A Option B Initial cost Annual cash inflows 164,000 $270,000 70,600 $81,000 31,700$26,0 Annasl cash outflows Cost to rebuld (end of year 4) Salvage value Estimated useful lide $49,680 5o 0 $8,800 7 years 7 years Click here to view P table Compite the 1) net presert value, 2) prentabity in ex, and (3) im ernal rateof return for each oton (Mnr To so ve 'y inte-al rste of return, experrr rt-ith temat e discort nte' to a rive-t , Nt present alue of zero ("'he net prosent value is negotive use either a negative s gn swe, ed essa ehe number e. 45 or pervestheses e g. (45). Round answers/or present value ani//R9 to decimal plaeseg. 125 and round profitabilbty idex to 3 dfecial places, 12.50 For caleulation purposes, use S decimal pfaces as displayed in the fator table provided) Net Present Vale Profitalsility leadex Enternal Rate of Return Option As Opton B t Estmated uneiud lie 7 years7 years Click here to view PV table internal rate of retan for each option (Hent: To soive for incernal rate of retam, experment with altermative discount rates to artive at a net present value of zero) (If the net present value is negative, use eitfher a negative sign preceding the mamber e.g. -45 or e.g. I 2S and round prolitability index to 2 decimal places, e.g. 12.sa. I or cakulaton purposes, use S dnmal places as displayed in the later table provided.) Present Value Profitability Index Internal Rate of Return udy Option A Option Which option should be acceted? should be accepted Click if you would like to Show Work for this question Opn hsnWar