X Alectra Utilities has two options for upgrading a geothermal power station to meet new government standards. Option 1: Alectra Utilities will make the upgrades themselves. This is expected to cost $11,000 at the end of each month for 15 years. At the end of the operation (in 15 years) Alectra Utilities expects to sell all equipment needed for the upgrade for $122,000. Option 2: Pay experienced contractors. This will cost $26,000 up front and $8,500 monthly for 12 years. Assume all interest is 2.61% compounded monthly 10 the nearest dollar. Round all Round the answers to NPV (Option 1), and NPV (Option other answers to two decimal places where applicable. 1) Find the net present value of option 1: Payments (Cost) Sale of equipment (Residual) P/Y C/Y - E N I/Y - 96 96 PV = PMT= s FV $ (If the NPV is negative, enter it as a negative number. If the NPV is zero, enter 0.) PER NPV (Option 1) = 5 (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) PAY CHY N 1/4 PV PMT FV S (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 Alectra Utilities choose? Option 1 Option 2 Either option could be chosen