Kitchen Wilmot Hydro has two options for upgrading a natural gas power station to meet new government standards. Option 1: Kitchen Wilmot Hydro will make the upgrades themselves. This is expected to cost $13,300 at the end of each month for 14 years. At the end of the operation (in 14 years) Kitchen Wilmot Hydro expects to sell all equipment needed for the upgrade for $123,000. Option 2: Pay experienced contractors. This will cost $46,000 up front and $14,000 monthly for 10 years. Assume all interest is 3.56% compounded monthly. Round the answers to NPV (Option 1), and NPV (Option 2) to the nearest dollar. Round all other answers to two decimal places where applicable. 1) Find the net present value of option 1: Payments (Cost) P/Y = Sale of equipment (Residual) C/Y = N = 1/4 = 96 96 PV = $ $ PMT $ FV riv $ (If the NPV is negative, enter it as a negative number. If the NPV is zero, enter 0.) NPV (Option 1) = $ 2) Find the net present value of option 2: Payments (Cost) P/Y C/Y N 1/Y % PV $ $ PMT FV (If the NPV is negative, enter it as a negative number. If the NPV is zero, enter 0.) NPV (Option 2) = $ 3) Which option should Kitchen Wilmot Hydro choose? Option 1 Option 2 Either option could be chosen