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

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Brooks Clinic is considering investing in new heart-monitoring equipment. It has two options. Option A would have an initial low cost but would require a significant expenditure for rebuilding 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 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 6%. Initial cost Annual cash inflows Annual cash outflows Cost to rebuild (end of year 4) Salvage value Estimated useful life Option A $171,000 $70,500 $29,600 $48,900 $0 7 years Option B $269,000 $81,500 $27,000 $0 $7,100 7 years Click here to view PV table. - Your answer is partially correct. 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 zero.) (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answers for present value and IRR to 0 decimal places, e.g. 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.) Net Present Value Profitability Index Internal Rate of Return Option A $ 18586 1.11 5998 % Option B $ 39962 1.15 1412 % Net Present Value Profitability Index Internal Rate of Return Option A $ 18586 1.11 5998 % Option B $ 39962 1.15 1412 % e Textbook and Media Assistance Use Save for Later Attempts: 2 of 3 used Submit Answe (b) The parts of this question must be completed in order. This part will be available when you complete the part above

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