Weiler Manufacturing, Inc. has a manufacturing machine that needs attention. (Click the icon to view additional information.) Weiler expects the following net cash inflows from the two options: (Click the icon to view the net cash flows.) Weller uses straight-line depreciation and requires an annual return of 16%. 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 Annual Accumulated 2,000,000 Amount Invested Requirements Year D $ 1 2 3 4 5 7 8 C (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements. Data table 1. Compute the payback, the ARR, the NPV, and the profitability index of these two options. Year Year 1 Refurbish Current Machine Purchase New Machine S 810,000 $ 2,520,000 Year 2 670,000 740,000 2. Which option should Weiler choose? Why? Year 3 490,000 560,000 Year 4 310,000 380,000 Year 5 130,000 200,000 Print Done Year 6 130,000 200,000 Year 7 130,000 200,000 Year 8 130,000 200,000 Year 9 200,000 200,000 Year 10 S 2,800,000 $ 5,400,000 Total More info The company is considering two options. Option 1 is to refurbish the current machine at a cost of $2,000,000. If refurbished, Weiler 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 $3,600,000. A new machine would last 10 years and have no residual value. Print Done Print Done