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Investment Project Scenario Pizza Palace is a pizza restaurant known for its posh dcor and its brick-oven pizza. Pizza Palace has five brick ovens that need attention and is considering two options. Both options will cost around $1,000,000 (initial investment). Option 1 is to refurbish its current brick-ovens. If refurbished, Pizza Palace expects the ovens to last another 6 years. The average annual income from refurbishing the ovens is $183,333.33. Refurbishing the ovens will have no salvage value. Option 2 is to replace the current ovens. New ovens would last 8 years and have no salvage value. The average annual income from buying a new oven is $143,750. Pizza Palace expects the following net cash inflows from the two options: Year Refurbish Current Ovens Purchase New Ovens 1 $600,000 $800,000 2 $500,000 $600,000 3 $400,000 $300,000 4 $300,000 $200,000 5 $200,000 $100,000 6 $100,000 $50,000 7 $50,000 8 $50,000 Pizza Palace uses straight-line depreciation and requires an annual return of 10% Requirements: 1. Calculations: Please use the provided Excel Template to calculate the payback, the ARR, the NPV, and profitability index for both options. (80 points) 2. Decision Write up: On a Word Document write (in 100 words or more) which option the company should choose and why. (70 points) a. Please include the following information in your decision write up: i. What is payback period? Based on payback period alone which option should the company choose? Why? ii. What is the Accounting Rate of Return (ARR)? Based on ARR alone which option should the company choose? Why? iii. What is Net Present Value (NPV)? Based on NPV alone which option should company choose? Why? iv. What is the profitability index? Based on profitability index alone which option should the company choose? Why? v. Based on all the calculations which option would you recommend the company choose? Why?