1.	Calculate the following for the special-purpose eye-testing machine:
	a.	Net present value
	b.	Payback period
	c.	Internal rate of return
	d.	Accrual accounting rate of return based on net initial investment
	e.	Accrual accounting rate of return based on average investment
2.	What other factors should Metro Clinic consider in deciding whether to purchase the special-purpose eye-testing machine?

2.) All Is correct

Manchester Clinic, a nonprofit organization, estimates that it can save $25,000 a year in cash operating costs for the next 9 years if it buys a special-purpose eye- testing machine at a cost of $100,000. No terminal disposal value is expected. Manchester Clinic's required rate of return is 10%. Assume all cash flows occur at year-end except for initial investment amounts. Manchester Clinic uses straight-line depreciation. Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Present Value of $1 Periods 2% 4% 0.980 0.962 0.961 0.925 0.942 0.889 0.924 0.855 0.906 0.822 0.888 0.790 0.871 0.760 0.853 0.731 0.837 0.703 0.820 0.676 0.804 0.650 0.788 0.625 13 0.773 0.601 0.758 0.577 0.743 0.555 OVOWN 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 8% 10% 0.926 0.909 0.857 0.826 0.7940.751 0.735 0.683 0.681 0.621 0.630 0.564 0.583 0.513 0.540 0.467 0.500 0.424 0.463 0.386 0.429 0.350 0.397 0.319 0.368 0.290 0.340 0.263 0.315 0.239 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 18% 20% 0.847 0.833 0.718 0.694 0.609 0.579 0.516 0.482 0.437 0.402 0.370 0.335 0.314 0.279 0.266 0.233 0.225 0.194 0.191 0.162 0.162 0.1370.112 0.116 0.093 0.099 0.078 0.084 0.065 22% 0.820 0.672 0.551 0.451 0.370 0.303 0.249 0.204 0.167 0.137 24% 0.806 0.650 0.524 0.423 0.341 0.275 0.222 0.179 0.144 0.116 26% 0.794 0.630 0.500 0.397 0.315 0.250 0.198 0.157 0.125 0.099 28% 0.781 0.610 0.477 0.373 0.291 0.227 0.178 0.139 0.108 0.085 30% 0.769 0.592 0.455 0.350 0.269 0.207 0.159 0.123 0.094 0.073 0.052 0.043 0.092 0.075 0.062 0.051 0.076 0.061 0.049 0.040 0.062 0.0 0.039 0.031 0.032 0.025 0.025 0.020 Present Value of Annuity of $1.00 in Arrears* Periods 2% 4% 6% 8% 0.980 0.962 0.943 0.926 1.942 1.8861.833 1.783 2.884 2.775 2.673 2.577 3.808 3.6303.465 3.312 4.713 4.4524.212 3.993 5.601 5.2424.917 4.623 6.472 6.002 5.5825.206 7.325 6.733 6.210 5.747 8.162 7.435 6.802 6.247 8.983 8.1117.360 6.710 9.787 8.760 7.887 7.139 12 10.575 9.385 8.384 7.536 11.348 9.986 8.853 7.904 14 12.106 10.563 9.295 8.244 15 12.849 11.118 9.712 8.559 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 12% 14% 0.893 0.877 1.690 1.647 2.402 2.322 3.037 2.914 3.605 3.433 4.111 3.889 4.564 4.288 4.968 4.639 5.328 4.946 5.650 5.216 5.938 5.453 6.194 5.660 6.424 5.842 6.628 6.002 6.8116.142 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 18% 20% 22% 0.847 0.833 0.820 1.566 1.528 1.492 2.174 2.106 2.042 2.690 2.589 2.494 3.127 2.991 2.864 3.498 3.326 3.167 3.812 3.605 3.416 4.078 3.837 3.619 4.303 4.031 3.786 4.494 4.192 3.923 4.656 4.327 4.035 4.793 4.4394.127 4.910 4.533 4.203 5.0084.611 4.265 5.092 4.675 4.315 24% 0.806 1.457 1.981 2.404 2.745 3.020 3.242 3.421 3.566 3.682 3.776 3.851 3.912 3.962 4.001 26% 0.794 1.424 1.923 2.320 2.635 2.885 3.083 3.241 3.366 3.465 3.543 3.606 3.656 3.695 3.726 28% 0.781 1.392 1.868 2.241 2.532 2.759 2.937 3.076 3.184 3.269 3.335 3.387 3.427 3.459 3.483 30% 0.769 1.361 1.816 2.166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3.249 3.268 TO Compound Amount of $1.00 (The Future Value of $1.00) Periods 2% 4% 6% 8% 10% 12% 1.020 1.040 1.060 1.080 1.100 1.120 1.040 1.082 1.124 1.166 1.210 1.254 1.061 1.125 1.191 1.260 1.331 1.405 1.082 1.170 1.262 1.360 1.464 1.574 1.104 1.217 1.338 1.469 1.611 1.762 1.126 1.265 1.419 1.587 1.772 1.974 1.149 1.316 1.504 1.714 1.949 2.211 1.172 1.369 1.594 1.851 2.144 2.476 1.195 1.423 1.6891.999 2.358 2.773 1.219 1.480 1.791 2.159 2.594 3.106 1.243 1.539 1.898 2.332 2.853 3.479 1.268 1.601 2.012 2.518 3.138 3.896 1.294 1.665 2.133 2.720 3.452 4.363 1.319 1.732 2.261 2.937 3.797 4.887 1.346 1.801 2.397 3.172 4.177 5.474 14% 16% 1.140 1.160 1.300 1.346 1.482 1.561 1.689 1.811 1.925 2.100 2.195 2.436 2.502 2.826 2.853 3.278 3.252 3.803 3.707 4.411 4.226 5.117 4.818 5.936 5.492 6.886 6.261 7.988 7.1389.266 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 3.759 4.435 5.234 6.176 7.288 8.599 10.147 11.974 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 22% 1.220 1.488 1.816 2.215 2.703 3.297 4.023 4.908 5.987 7.305 8.912 10.872 13.264 16.182 19.742 24% 1.240 1.538 1.907 2.364 2.932 3.635 4.508 5.590 6.931 8.594 10.657 13.215 16.386 20.319 25.196 26% 1.260 1.588 2.000 2.520 3.176 4.002 5.042 6.353 8.005 10.086 12.708 16.012 20.175 25.421 32.030 28% 1.280 1.638 2.097 2.684 3.436 4.398 5.629 7.206 9.223 11.80 15.112 19.343 24.755 31.691 40.565 12 13 14 15 | 16% 1.000 Compound Amount of Annuity of $1.00 in Arrears* (Future Value of Annuity) Periods 2% 4% 6% 18% 10% | 12% 14% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.020 2.040 2.060 2.080 2.100 2.120 2.140 3.060 3.122 3.184 3.246 3.310 3.374 3.440 4.122 4.246 4.375 4.506 4.641 4.779 4.921 5.204 5.416 5.637 5.867 6.105 6.353 6.610 6.308 6.633 6.975 7.336 7.716 8.115 8.536 7.434 7.898 8.394 8.9239.487 10.089 10.730 8.583 9.214 9.897 10.637 11.436 12.300 13.233 9.755 10.583 11.491 12.488 13.579 14.776 16.085 10 10.950 12.006 13.181 14.487 15.937 17.549 19.337 11 12.169 13.486 14.972 16.645 18.531 20.655 23.045 12 13.412 15.026 16.870 18.977 21.384 24.133 27.271 14.680 16.627 18.882 21.495 24.523 28.029 32.089 14 15.974 18.292 21.015 24.215 27.975 32.393 37.581 15 17.293 20.024 23.276 27.152 31.772 37.280 43.842 2.160 3.506 5.066 6.877 8.977 11.414 14.240 17.519 21.321 25.733 30.850 36.786 43.672 51.660 18% 20% 1.000 1.000 2.180 2.200 3.572 3.640 5.215 5.368 7.154 7.442 9.442 9.930 12.142 12.916 15.327 16.499 19.086 20.799 23.521 25.959 28.755 32.150 34.931 39.581 42.21948.497 50.818 59.196 60.965 72.035 22% 1.000 2.220 3.708 5.524 7.740 10.442 13.740 17.762 22.670 28.657 35.962 44.874 55.746 69.010 85.192 24% 1.000 2.240 3.778 5.684 8.048 10.980 14.615 19.123 24.712 31.643 40.238 50.895 64.110 8 0.496 100.815 26% 1.000 2.260 3.848 5.848 8.368 11.544 15.546 20.588 26.940 34.945 45.031 57.739 73.751 93.926 119.347 13 Requirement 1. Calculate the following for the special-purpose eye-testing machine: a. Net present value (NPV) (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value is $ 41.6097 b. Payback period (Round your answer to two decimal places.) The payback period is 5.00 years. c. Internal rate of return (Round the rate to two decimal places, X.XX%.) The internal rate of return (IRR) is 7%. d. Accrual accounting rate of return based on net initial investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX%.) The accrual accounting rate of return (AARR) is -8.89-% based on net initial investment. e. Accrual accounting rate of return based on average investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX%.) The accrual accounting rate of return (AARR) is 17.78-% based on average investment