Question 1 (20 marks) The Blue River Water Adventure Park is trying to determine which brand of equipment should be purchased for operating the playground. 1. The Hobart equipment has a cost of $108,000. The equipment is expected to have a 10- year useful life and a $15,000 salvage value. Annual cash flows are expected to increase by $35,000 2. The Sebo equipment has a cost of $225,000. This equipment will have a 6-year useful life and a salvage value of $25,000. Annual cash flows are expected to increase by $85,000 The company's required return on investment is 8%. Required a. Calculate the Net Present Value (NPV) for each brand of equipment and profitability index for each b. Which brand of equipment should be purchased if decision is based on the profitability index? c. Calculate the payback period in years. If the company would like a payback period of 5 years or less, which brand of equipment should they invest in? Which brand of equipment provides the payback the quickest