Thomas Taylor is evaluating two new business opportunities. Each of the opportunities shown below has a 15-year life. Thomas uses a 12% discount rate.

	Option 1	Option 2
Equipment purchase and installation	$72,000	$83,610
Annual cash flow	$29,000	$31,380
Equipment overhaul in year 6	$4,980	-
Equipment overhaul in year 8	-	$6,390

a) Calculate the net present value of the two opportunities. (Round present value factor calculations to 4 decimal places, e.g. 1.2514 and the final answers to 0 decimal places, e.g. 59,991.)

Net Present Value:

Option 1 =

Option 2 =

b) Calculate the profitability index of the two opportunities. (Round answers to 2 decimal places, e.g. 15.25.)

Profitability Index:

Option 1 =

Option 2 =