Brooks clinic is considering investing in new heart-monitoring equipment.It has two options. Option...
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Brooks clinic is considering investing in new heartmonitoring equipment.It has two options. Option A would have and initial lower cost but would require a significant expenditure for rebuilding after 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 Compute the net present value, profitability index, and 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 or parentheses eg Round answers for present value and IRR to decimal places, eg and round profitability index to decimal places, eg For calculation purposes, use decimal places as displayed in the factor table provided.
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