Suchbook Solutions | Chegg.com Congre Cevi Swifty Clinic is considering investing in new heart-monitoring equipment. It has two options. Option A would have an initial lower cost but would require a significant expenditure for rebuilding after 4 years. Option 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 salvage value at the end of its useful life. The following estimates were made of the cash flows. The company's cost of capital is 5%. Option A Option B Initial cost $166,000 $278,000 Annual cash inflows $70,600 $81,000 Annual cash outflows $31,700 $26,700 Cost to rebuild (end of year 4) $49,600 $0 Salvage value $0 $8,800 Estimated useful life 7 years 7 years Click here to view PV table. (a) Compute the (1) net present value. (2) profitability index, and (3) Internal rate of return for each option. (Hint: To solve for internal rate of return experiment with alternative discount rates to arrive at a net present value of sero) of the net present value is negative, use either a negative sign preceding the number e.3.-45 or parentheses e.8. (45). Round answers for present value and IRR to decimal places 125 and round profitability Index to 2 decimal places, e.g. 12.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal Rate of Return Profitability Index Net Present Value Option A $ Option B $ e Textbook and Media MacBook Air s