Part 2 (approx. 20 mins). Here are two Capital Budgeting exam problems from prior semester exams. Mcintyre's Eye Clinic is considering investing in a new optical-scanning machine. It has two options: Option A would have an initial lower cost but would require major repairs (cost to rebuild) at the end of the 3rd year. Option B is more expensive, has slightly higher annual maintenance costs but does not require a major overhaul. It also has a salvage value at the end of its useful life. The useful life for both machines is 6 years. DESCRIPTION OPTION A OPTION B Optical Scanning $ 160,000 $ 175,000 Equipment Annual Cash Inflows $ 60,000 $ 55,000 Annual Cash Outflows $ 20,000 $ 25,000 Major Repair (cost to $ 50,000 rebuild) Salvage Value $ 75.000 0 0 The company's cost of capital is 10% Required: 1. Calculate the net present value of the optical scanners. 2. Which optical-scanning machine should the company purchase based on your answer to #1? Why? 3. What is the prohtability index for each machine? Would your answer change based on this metric? 4. Why is the net present value method a better method than the others you learned about? (4 points)