Capital project evaluation Fussco Company is evaluating a proposal to acquire several new drill presses for its production department. The cost of the equipment is $73,400. The equipment has a useful life of 10 years and is expected to produce cost savings of $15,750 per year. There is no salvage value. The company's cost of capital is 16 percent.

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REQUIRED a. Compute the net present value of the project. b. Compute the profitability index. c. Compute the internal rate of return.