Tulsa Company is considering investing in new bottling equipment and has two options: Option A has a lower initial cost but would require a significant expenditure to rebuild the machine after four years; Option B has higher maintenance costs, but also has a higher salvage value at the end of its useful life. Tulsas cost of capital is 11 percent. The following estimates of the cash flows were developed by Tulsas controller:

	Option A			Option B
Initial investment	$	320,000		$	454,000
Annual cash inflows		150,000			160,000
Annual cash outflows		70,000			75,000
Costs to rebuild		120,000			0
Salvage value		0			24,000
Estimated useful life		8	years		8	years

Required:

Calculate NPV. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided.) Option A: Table or Calculator Function: n = i = % Cash Flows Cash Flows Discount Factor Present Value Annual Cash Flows Cost to Rebuild Salvage Capital Investment Net Present Value Option B: Table or Calculator Function: n = i = % Cash Flows Cash Flows Discount Factor Present Value Annual Cash Flows Cost to Rebuild Salvage $0 Capital Investment Net Present Value