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Brooks clinic is considering investing in new heart-monitoring equipment.It has two options. Option...

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Accounting

Brooks clinic is considering investing in new heart-monitoring equipment.It has two options. Option A would have and 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 salvage 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%.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.12.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
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