XYZ Co. has just been presented with an option of working cooperatively with another company instead if of purchasing a new machine. The details of this option are: initial investment of $120,000, net operating cash flows (years 1-3) of 47,000, 49,000 and 52,000 respectively (already takes into account depreciation effect and terminal cash flow so there is no need to calculate depreciation effect or terminal value just use these numbers as-is for your analysis), cost of capital for this project is 8.2%.

What is the NPV for the new alternative?

	a.	6,343
	b.	7,980
	c.	4,515
	d.	6,807

The option of working cooperatively with another company has just been presented instead of purchasing the new machine. The details of this option are: initial investment of $120,000, net operating cash flows (years 1-3) of 47,000, 49,000 and 52,000 respectively (already takes into account depreciation effect and terminal cash flow so there is no need to calculate depreciation effect or terminal value just use these as-is for your analysis), cost of capital for this project is 8.2%.

What is the IRR for the new alternative?

	a.	7.5%
	b.	11.06%
	c.	12.12%
	d.	8%

So we have 2 options for XYZ Co.: purchase a new machine or work cooperatively with another company. Using your NPV and IRR answers from the previous questions, which should they choose (new machine or work cooperatively) and why (25 words or less)?