E$11-11($Static$)$ Using NPV to Evaluate Mutually Exclusive Projects $[$LO $11-5]$

Tulsa Company is considering investing in new bottling equipment and has two options: Option A has a lower initial cost but would require a significant expenditure to rebuild the machine after four years; Option B has higher maintenance costs but also has a higher salvage value at the end of its useful life. Tulsa$$s cost of capital is $11$ percent. The following estimates of the cash flows were developed by Tulsa$$s controller:

$$Option AOption BInitial investment$ $320,000$$ $454,000$Annual cash inflows$150,000160,000$Annual cash outflows$70,00075,000$Costs to rebuild$120,0000$Salvage value$024,000$Estimated useful life$8$ years$8$ years

Required:

Calculate NPV$.($Future Value of $$1,$Present Value of $$1,$ Future Value Annuity of $$1,$ Present Value Annuity$$of $$1.)$

Determine which option Tulsa should select?