Question: Please help and show steps thank you! Problem 24-3A Brooks Clinic is considering investing in new heart-monitoring equipment. It has two options. Option A would

Please help and show steps thank you! Problem 24-3A Brooks Clinic isPlease help and show steps thank you!

Problem 24-3A Brooks Clinic is considering investing in new heart-monitoring equipment. It has two options. Option A would have an initial lower cost but would require a significant expenditure for rebuilding after 4 years. Option B would require no rebuilding expenditure, but its maintenance costs would be higher. Since the Option B machine is of initial higher quality, it is expected to have a salag value at the end of its useful life. The following estimates were made of the cash flows. The company's cost of capital is 5% Option A Option B $196,000 $291,000 $72,500 $82,500 $28,000 $25,600 Initial cost Annual cash inflows Annual cash outflows Cost to rebuild (end of year 4) $49,100 galue Estimated useful life $0 $8,500 7 years 7 years Compute the (1) net present value, (2) profitability index, and (3) internal rate of return for each option. (Hint: To solve for internal rate of return, experiment with alternative discount rates to arrive at a net present value of zero.) (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answers for present value and IRR to 0 decimal places, e.g. 125 and round profitability index to 2 decimal places, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net Present Value Profitability Index Internal Rate of Return Option A 2109 Option B 32203 LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR PROBLEM Which option should be accepted? Option B should be accepted Click if you would like to Show Work for this

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