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Sandhill Clinic is considering investing in new heart-monitoring equipment. It has two options. Option A wovild have an initial iower cost but would require a

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Sandhill Clinic is considering investing in new heart-monitoring equipment. It has two options. Option A wovild have an initial iower cost but would require a significant expenditure for rebuildiag after 4 years, Option B would require no rebuilding expenditure, but its maintenance costs would be higher. Since the Option B machine is of initial higher quality, it is expected to have a saluage value at the end of its useful life. The following estimates were made of the cash flows. The company's cost of capital is 6% TABIE 1 Future Value of 1 TABLE 2 Future Value of an Annuity of 1 TABLE 3 Present Value of 1 TABLE 4 Present Value of an Annuity of 1 Compute the (1) net present value, (2) prohtability index, and (3) internal rate of return for each option. (Hint: To solve for intern a! rate of return, experiment with alternative discount rates to arrive at a net present value of zero.) (of the net present value is negative, use either a negotive sign preceding the number eg -45 or parentheses eg (45). Round answers for present value and IRI to 0 decimal ploces, es, 125 and round profitability index to 2 decimal ploces es. 12.50. For colculation purposes, use 5 decimal placis as disployed in the foctor table provided.)

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