uring, Inc. has a manufacturing machine that needs attention. LOADING...(Click the icon to view additional information.) Kilmer expects the following net cash inflows from the two options: LOADING...(Click the icon to view the net cash flows.) Kilmer uses straight-line depreciation and requires an annual return of 12%. . . . Question content area top right Part 1 LOADING... (Click the icon to view Present Value of $1 table.) LOADING... ( Click the icon to view Present Value of Ordinary Annuity of $1 table.) LOADING... (Click the icon to view Future Value of $1 table.) LOADING... (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirementsLOADING.... Question content area bottom Part 1 Requirement 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. Compute the payback for both options. Begin by completing the payback schedule for Option 1 (refurbish). Net Cash Outflows Net Cash Inflows Year Amount Invested Annual Accumulated 0 $1,600,000 1 $120,000 $120,000 2 560,000 680,000 3 440,000 1,120,000 4 320,000 1,440,000 5 200,000 1,640,000 6 200,000 1,840,000 7 200,000 2,040,000 8 200,000 2,240,000 Part 2 (Round your answer to one decimal place.) The payback for Option 1 (refurbish current machine) is 4.8 years. Part 3 Now complete the payback schedule for Option 2 (purchase). Net Cash Outflows Net Cash Inflows Year Amount Invested Annual Accumulated 0 $4,800,000 1 $3,330,000 $3,330,000 2 710,000 4,040,000 3 590,000 4,630,000 4 470,000 5,100,000 5 350,000 5,450,000 6 350,000 5,800,000 7 350,000 6,150,000 8 350,000 6,500,000 9 350,000 6,850,000 10 350,000 7,200,000 Part 4 (Round your answer to one decimal place.) The payback for Option 2 (purchase new machine) is 3.4 years. Part 5 Compute the ARR (accounting rate of return) for each of the options. Average annual operating income Average amount invested = ARR Refurbish = % Purchase = % Help me solve thisDemodocs example Get more help pop-up content starts More info The company is considering two options. Option 1 is to refurbish the current machine at a cost of $ 1 comma 600 comma 000. If refurbished, Kilmer expects the machine to last another eight years and then have no residual value. Option 2 is to replace the machine at a cost of $ 4 comma 800 comma 000. A new machine would last 10 years and have no residual value. pop-up content ends pop-up content starts Data table Year Refurbish Current Machine Purchase New Machine Year 1 $120,000 $3,330,000 Year 2 560,000 710,000 Year 3 440,000 590,000 Year 4 320,000 470,000 Year 5 200,000 350,000 Year 6 200,000 350,000 Year 7 200,000 350,000 Year 8 200,000 350,000 Year 9 350,000 Year 10 350,000 Total $2,240,000 $7,200,000 pop-up content ends