City Hospital, a taxpaying entity, estimates that it can save $28,000 a year in cash operating costs for the next 10 years if it buys a special-purpose eye-testing machine at a cost of $110,000. No terminal disposal value is expected. City Hospital's required rate of return is 14% Assume all cash flows occur at year-end except for initial investment amounts. City Hospital uses straight-line depreciation. The income tax rate is 30% for all transactions that affect income taxes (Click the icon to view the Future Value of $1 factors) (Click the icon to view the Present Value of $1 factors.) Read the requirements (Click the icon to view the Future Value of Annuity of $1 factors.) (Click the icon to view the Present Value of Annuity of $1 factors.) Requirement 1. Calculate the following for the special-purpose eye-testing machine a. Net present value (NPR) (Round interim calculations and your final answers to the nearest whole dollar. Use a minus sign or parentheses for a negative net present value.) The net present value is $ b. Payback period (Round your answer to two decimal places) The payback period is years Requirement 2. How would your computations in requirement 1 be affected if the special-purpose machine had a $10,000 terminal disposal value at the end of 10 years? Assume depreciation deductions are based on the $110,000 purchase cost and zero terminal disposal value using the straight-line method. Answer briefly in words without further calculations NPV would Payback would increase decrease because the disposal value because the disposal value results in an increase in the total present value of cash inflows. results in an additional cash inflow Requirements 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. How would your computations in requirement 1 be affected if the special-purpose machine had a $10,000 terminal disposal value at the end of 10 years? Assume depreciation deductions are based on the $110,000 purchase cost and zero terminal disposal value using the straight-line method Answer briefly in words without further calculations. Print Done - X ac Z of Compound Amount of $1.00 (The Future Value of $1.00) S P1+. In this table P $1.00 Periods 2% 2 0% 5% 10% 12% 14% 18% 18% 20% 22% 20% 29% 29% 30% 22% 40% Periods 1 1.020 1.040 1.060 1.080 1.100 1.120 1.140 1.160 1.180 1.200 1.220 1.240 1.250 1.290 1.300 1320 1,400 2 1.040 1.082 1.124 1.166 1.210 1.254 1.300 1.346 1392 1.440 1.488 1.538 1.588 1.638 1.690 1.742 1.960 2 3 1.061 1.125 1.191 1.260 1.331 1.405 1.482 1561 1.643 1.728 1816 1.907 2.000 2097 2.197 2.300 2744 3 4 1.082 1.170 1.262 1.360 1.464 1.574 1.689 1.311 1.309 2074 2215 2364 2520 2684 2856 3.036 3.842 4 5 1.104 1.217 1.338 1.469 1611 1.762 1.925 2.100 2288 2488 2.703 2932 3.176 3436 1713 4.007 5.378 S 6 1.126 1255 1.419 1.587 1.772 1.974 2.195 2.436 2700 2.986 3.297 3635 4.002 4.398 4827 5.290 7.530 6 7 1.149 1.316 1.504 1.714 1.949 2211 2502 2826 3.185 3.583 4.023 4508 5042 5629 6.275 6.983 10.541 7 1.172 1.369 1.594 1.851 2.144 2476 2853 3278 3750 4.300 4.908 5500 6353 7.206 8.157 9.217 14.758 8 9 1.195 1423 1.689 1.999 2358 2.773 3252 3.103 4435 5.160 5.987 6.931 8005 9.223 10.604 12.166 20.661 9 10 1.219 1.480 1.791 2.159 2.594 3.106 3.707 4.411 5234 6.192 7305 8594 10.006 11.806 13.706 16.060 28.925 10 11 1.243 1539 1.890 2.332 2853 3.479 4226 5.117 6.176 7.430 8912 10657 12.700 15.112 17.922 21.199 40.496 11 12 1.268 1501 2012 2518 3.138 3.996 4818 5.936 7288 8.916 10.872 13.215 16012 19.343 23.298 27.983 56.694 12 13 1.294 1.565 2.133 2720 3.452 4.363 5492 6.385 1.599 10.599 13.254 16.306 20.175 24.759 30.288 36.937 79.371 13 14 1.319 1732 2261 2937 3.797 4.887 6261 7.908 10.147 12809 16.182 20.319 25421 31.691 39.374 48.757 111.120 14 15 1.346 1.801 2.397 3.172 4.177 5474 7.138 $256 11.974 15.407 19.742 25.196 32030 40.565 51.186 64.359 155.568 15 16 1373 1873 2540 3426 4.595 6.130 8.137 10.748 14.129 18.488 24.086 31.243 40.358 51.923 66542 84.954 217.795 16 17 1.400 1948 2003 3700 5054 9989 9.276 12.468 16672 22.186 29.384 38.741 50851 66.461 06504 112.139 304.913 17 18 1428 2026 2854 3.996 5.560 7.890 10.575 14.463 19673 26.623 35849 48009 64.072 15071 112455 148024 426.879 18 19 1457 2.107 3026 4.316 6.116 8.613 12.056 16.777 23.214 31.948 43.736 58.568 80731 10.890 146.192 195.391 587.830 19 20 1496 2.191 3.207 4.661 6.727 9.646 13743 19.461 27.303 38.338 53.358 73.864 101.721 139.380 190050 257.916 836.683 20 21 1516 2279 3.400 5004 7.400 10.804 15568 22574 32324 46.005 65.096 91.592 128.169 178.406 247.065 340.449 1171356 21 22 1.546 2.370 3604 5437 8.140 12.100 17.361 26.186 38.142 55.206 79418 113574 161.492 228.360 321.184 449.353 1639.898 22 23 1577 2.465 3820 5871 854 13.552 20.362 30.376 45.008 66.247 96.009 140.831 201400 292.300 417.539 503.199 2295857 23 24 1.60 2563 4.049 8.341 9.850 15.179 23.212 35236 53.109 79.497 118.205 174631 25 1841 2666 4292 6.948 10.35 17.000 26.462 40.874 62.659 26 1873 2.772 4.549 7.396 11918 19.040 30.167 47.414 73.549 27 1.707 2003 4822 7.98 13.110 21.325 34.390 55.000 87.260 28 1741 2999 5.112 8827 14.421 284 39.204 63.800 102.967 29 1776 3119 5418 9.317 15.863 26.750 44.693 74.009 121.501 30 1.811 3243 5743 10.063 17.449 29.960 50.950 85850 143371 256.385 95.396 144.210 216.542 322045 114.475 175.906 268.512 487037 612.998 137371 214.642 332.955 512.867 784.83 164.845 251.864 412.864 646.212 1004.336 1550293 197.814 319.474 511.952 814.228 1285.550 2015.381 237376 389.758 634.820 1025.827 1645505 2619.996 374.144 542.801 783023 3214.200 24 478.905 705.641 1033590 4499.380 25 917.333 1364.339 6299831 26 1192.533 1800 927 8819.764 27 2377-224 12347.570 28 3137.935 17296.732 29 25 2.000 3.946 7.686 14.785 28.102 52800 4142075 24201.432 30 98.100 180.314 327.997 AD 2.208 4.801 10.286 21.725 45.259 $3.051 590.468 1053.402 1861.054 3258.125 5453.911 9727360 19599.217 130161.112 35 168804 378.721 750378 1469772 2947038 5455.913 10347.175 1942559 36115 68520767 700037657 40 Present Value of $1.00 S (1 +1 In this table S-$1.00. Periods 2% 4% 05 8% 10% 12% 14% 10% 18% 20% 22% 24% 26% 20% 30% 22% 40% Periods 1 0.980 0.962 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 0.806 0.794 0.781 0.769 0.758 0.714 1 2 0.961 0.925 0.890 0.857 0.826 0.797 0769 0.743 0718 0.694 0572 0.650 0.630 0.610 0.592 0.574 0.510 2 3 0.942 0.889 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 0.551 0.524 0.500 0.477 0.455 0.435 0.364 3 4 0.924 0.855 0.792 0.735 0.683 0.636 0592 0.552 0516 0.482 0.451 0423 0.397 0.373 0.350 0.329 0.260 4 5 0.906 0.822 0.747 0.681 0.621 0.567 0519 0.476 0437 0.402 0.370 0.341 0.315 0.291 0.269 0.250 0.196 5 6 0.888 0.790 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.303 0.275 0.250 0.227 0.207 0.189 0.133 6 7 0.871 0.760 0.665 0.583 0513 0.452 0.400 0.354 0.314 0.279 0249 0.222 0.198 0.178 0.159 0.143 0.095 7 8 0.853 0.731 0.627 0.540 0.467 0.404 0.351 0.305 0.256 0.233 0.204 0.179 0.157 0.139 0.123 0.108 0.068 8 9 0.837 0.703 0.592 0.500 0.424 0.361 0.300 0.263 0.225 0.194 0.167 0.144 0.125 0.108 0.094 0.082 0.048 9 10 0.820 0.676 0.558 0.463 0.396 0322 0270 0227 0.191 0.162 0.137 0.116 0.099 0.085 0.073 0.062 0.035 11 0.804 0650 0527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.112 0.094 0.079 0.066 0.056 0.047 10 0.025 11 12 0.788 0625 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.002 0.076 0.062 0.052 0.043 0.0036 0.018 12 13 0.773 0501 0.469 0.368 0.290 0229 0.182 0.145 0.116 0.093 0.075 14 0.758 0.577 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 15 0.743 0.555 0.417 0315 0.239 0.183 0.140 0.108 0.084 0.065 0.051 16 0.728 0.534 0.394 0.292 0.218 0.163 0.123 0.093 0.071 0.054 17 0.714 0.513 0.371 0270 0.198 0.146 0.108 0.080 0.060 0.045 0.034 18 0700 0.494 0.350 0.250 0.100 0.130 0.095 0.069 0.051 0.038 0.028 0.021 19 0.506 0475 0.331 0232 0.164 0.116 0.083 0.060 0.043 0.031 0.023 0.017 0.061 0.050 0.062 0.049 0.039 0.032 0.025 0.040 0.031 0.025 0.042 0.032 0.025 0.019 0.015 0.026 0.020 0.015 0.012 0.009 0.016 0.0121 0.009 0.040 0.033 0.027 0.013 13 0.021 0.009 14 0.020 0.016 0.006 15 0.012 0.005 16 0.003 17 0.012 0.009 0.007 0.002 18 0.007 0.005 0.002 19 20 0.673 0.456 0312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 0.019 0.014 0.010 21 0.660 0.439 0.294 0.199 0.135 0.093 0.064 0.044 0.031 0.022 0.015 0.011 0.008 0.006 22 0847 0.422 0.278 0.184 0.123 0.083 0.056 0.038 0.025 0018 0.013 0.009 0.006 0.004 23 0634 0.406 0.262 0.170 0.112 0.074 0.049 0.033 0.022 0.015 0.010 0.007 0.005 0.003 24 0.622 0.390 0.247 0.158 0.102 0.066 0.043 0.028 0.019 0.013 0.008 0.006 0.004 0.003 25 0510 0.375 0.233 0.145 0.092 0.059 0.008 0.024 0.016 0.010 0.007 0.005 0.003 0.002 0.001 0.007 0.005 0.004 0.003 0.002 0.001 22 0.002 0.002 0.000 0.002 0.001 0.000 0.001 0.000 0.004 0.001 20 0.003 0.001 21 23 24 25 26 0.598 0.361 0.220 0.135 0.064 0.053 0.033 0.021 0.014 0.009 0.006 0.004 0.002 0.002 0.001 0.001 0.000 26 27 0.506 0.347 0.207 0.125 0.076 0.047 0.029 0.018 0.011 0.007 0.005 0.003 0.002 0.001 0.001 0.001 0.000 27 28 0.574 0.333 0.196 0.116 0.069 0.042 0.026 0.016 0.010 0.006 0.004 0.002 0.002 0.001 0.001 0.000 0.000 20 29 0.563 0.321 0.185 0.107 0.063 0.037 0.022 0.014 0.008 0.005 0003 0.002 0.001 0.001 0.000 0.000 0.000 29 30 0.552 0.300 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 0.003 0.002 0.001 0.001 0.000 0.000 0.000 30 35 0500 0.253 0.130 0.068 0.036 0.019 0.010 0.006 0.003 0.002 0.001 0.001 0.000 0.000 0.000 0.000 0.000 35 40 0453 0.200 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.000 40 Compound Amount of Annuity of $1.00 in Arrears" (Future Value of Annuity) S= (1+1-1 Periods 2% G 1% 10% 12% -10% 10% 18% 22% 24% 20% 20% 30% 12% 40% Periods 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1 2 2020 2040 2.060 2.000 2.100 2.120 2.140 2.100 2.100 2.200 2220 2.240 2260 2.200 2300 2320 2.400 2 3 3.060 3.122 3.184 3246 3.310 3.374 3.440 3.506 3572 3640 3.708 3.778 3.848 3.918 3.990 4.062 4.360 3 4 4.122 4.246 4375 4.506 4641 4.779 4921 5.066 5.215 5.368 5.524 5684 5848 6.016 6.187 6.362 7.104 5 5.204 5416 5.637 5.867 6.105 6353 6.610 6.877 7.154 7.442 7.740 8048 8.368 8.700 9.043 9.398 10.946 6 6.308 6.630 6975 7.336 7.716 8.115 8.536 8.977 9442 9.930 10.442 10.900 11.544 12.136 12756 13.406 16.324 7 7.434 7.898 8.394 8.923 9.487 10.009 B 8.583 9.214 9.897 10.637 11.436 12.300 13.233 9 9.755 10.583 11.491 14.776 10 10.950 11 12.169 13.486 17.549 20.855 12 13412 15.026 13 14.680 16.627 14 32.393 10.730 11.414 14.240 15.327 16.499 16.085 17.519 19.096 20.799 19.337 21.321 23.521 25.950 23.045 25.733 28.755 32.150 27.271 30.850 34.931 32.089 36.706 42219 37.581 43872 50.818 58.196 12.142 12.916 13.740 14.615 15.546 16.534 17583 18.006 23.853 17.762 19.123 20.588 22.163 23.858 25.678 34.395 15 37.290 16 42.753 41842 51.660 60.965 72.035 50.900 60.925 72.909 87.442 17 50.118 71.673 87.068 105.931 18 19 20 21 22 23 24 25 32.030 26 33671 27 28 29 30 35 40 12.488 13579 12.006 13.181 14.487 15.937 14.972 16.645 18531 16.870 18.977 21.384 24.133 18882 21.495 24523 28029 15974 18.292 21.015 24.215 27.975 17.290 20.024 23.276 27.152 31.772 18639 21.825 25873 30.324 35.950 100.815 119.347 125.011 20.012 23.898 28.213 31750 40.545 48.884 151.377 181.868 21.412 25645 30.906 37.450 45.599 55.750 129.020 157.253 191.735 233.791 68.394 84.141 103.740 128.117 158.405 195.994 242585 300.252 22.841 27671 33760 41.446 $1.159 62.440 78.969 98603 123.414 154740 194.254 244.033 306558 35.323 24297 29778 36.786 45.762 57275 72.052 91.025 115.380 146528 186648 237.99 301601 387.309 494.213 25.783 31.969 39.993 50.423 64.002 81.599 104.768 134841 174.021 225025 291.347 27.299 34248 43.392 55.457 71.403 92.500 120.436 157415 206.345 271.001 356.443 469.056 617.278 811.999 1067280 1401.225 377.465 489.110 633.590 28845 36.618 46.996 60.83 79543 104.600 138.297 183601 244.487 326237 43561 542.630 778.771 1040.358 138464 150622 30.422 39.03 50.816 66.765 8497 118 155 158.659 213.978 299.494 392.484 532.750 722.461 92.251 1332459 1006.000 2443.821 41.646 54.865 73.106 94347 131334 181471 249.214 342503 471981 650.955 09092 1238.636 1706803 2348303 3226.444 44.312 50.156 79.954 109.182 150.334 208.333 290.008 405.272 567.377 795.165 1114634 1561882 2185.708 3054.444 35.344 47.004 63.706 87351 121.100 100.374 238.499 337.502 47221 81853 $71.302 1383.146 1968.719 2798.706 2871.778 5624772 22046.910 21 4260434 37.051 49.964 68528 95.339 134210 19099 27289 392.503 546.481 818.223 1185744 1716.101 2481.56 3583344 5164311 7425.99 3066.674 28 38.792 52966 73.640 103.966 148631 214.583 312.054 456.303 0.447 84008 1447300 2128.965 3127.790 4567 500 6714.604 9902.923 43214.343 29 40.568 56085 75.058 113.263 164 454 241.333 356787 530312 790548 11812 176701 2540915 3942026 5873.231 49.994 73.652 111.435 172.317 271024 431663 93573 1120713 1816852 2948.341 4783645 7750 225 12527 442 20188.906 32422868 51869.427 225400279 35 8729 505 12940.059 60501.001 30 60.402 95.025 154762 259057 442.53 762.001 1342025 2360757 4163213 7343858 1206 535 22728803 29742982 69377 A00 126382883 207874.272 1750091741 Pep at the rod of each prod 40 22.610 24712 26.940 29.369 32015 34.995 49.153 28.657 31.643 34.945 38.593 42619 47.062 69.814 10 35.962 39.501 48.497 44.874 40.23 50.895 55.746 64.110 73751 69.010 80.496 93.926 109.612 85.192 104.335 45031 50.398 56.405 61.122 98.739 11 57.739 65.510 74.327 $4.320 139235 12 84.853 97.625 112.300 195.92913 127.913 149.240 275.300 14 141.303 167.296 197.997 386.420 15 218.472 252.356 541.988 16 295014 347.309 759.784 17 371518 459.449 1064.607 18 483.973 607.472 1491.576 19 630.165 02.063 2009 206 20 820215 1060.775 29250921 4097.245 22 5737.142 23 11247.399 25 8032.999 24 15747079 25 Present Value of Annuity $1.00 in Arrears Periods 25 1% 15 10% 12%. 14% 10% 18% 20% 22% 20% 29% 28% 12% 40% Periods 1 0.980 0.962 0.943 0.926 0.909 0.893 0877 0.852 0847 0833 2 1.942 1.886 1.833 1.783 1.736 1.690 1.647 1.605 1566 1.528 3 2.884 2775 2673 2577 2.487 2.402 2322 2245 2.174 2.106 4 3.808 3.630 3.465 3312 3.170 3.037 2.914 2798 2.690 2589 2.494 5 4.713 4.452 4212 3.993 3.791 3.605 3433 3274 3.127 2.991 6 5.601 5.242 4.917 4.623 4.355 4.111 3.889 3.685 7 6.472 5.002 5.582 5.206 4.868 4.564 4.288 4.039 8 7325 6.733 6.210 5747 5.335 4.968 4.639 4.344 9 8.162 7.435 6.802 6247 5759 5.328 4.946 4.607 10 8.983 8.111 7.360 6.710 6.145 5.650 5216 11 9787 8.760 7.887 7.139 6.495 5.938 4.833 5.453 5.029 12 10575 9.385 8.384 7.536 6814 5.194 13 11.348 9.996 8.853 7.904 7.103 6.424 5.660 5.842 14 12.106 10.563 9.295 8.244 7.367 6.628 5.008 15 12.849 11.118 9.712 8559 7.606 6311 6.142 5575 5.092 16 13.578 17 14.292 18 19 20 10.106 8851 7.824 6.974 12.106 9.122 022 7.120 14.992 12.659 10.828 9.372 8.201 7.250 15.678 13.134 11.158 9.004 8.365 7.366 16.351 13.590 11.470 9.818 8514 7.469 5668 21 17.011 14.029 11.764 10.017 8649 7562 22 17.658 14.451 12.042 10.201 8772 7.545 6743 6011 23 18.292 14.857 12.303 10.371 7.718 6.792 6.044 24 18.914 15.247 12.550 10.529 8.985 5410 4.509 5432 4.925 4.499 5451 4.937 4.507 25 40 19.523 15.622 12.783 26 20.121 15.983 13.003 10.810 9.161 7.396 27 20.707 16.330 13.211 10.935 9.237 7.943 28 21.281 16.663 13.406 11.051 9.307 7.904 29 21.844 15.984 13.591 11.158 9.370 8022 30 22.396 17.292 13.765 11.25 9427 8.055 7.003 24.999 18.665 14.498 11.655 8.176 7.070 27.355 19.790 15.046 11.925 8.244 7.105 10.675 9.077 7.843 6.873 8.906 6.535 6.961 6.983 3644 9779 0820 0.806 0.794 0.781 1.492 1.457 1.424 1.392 2042 1.981 1.923 1.868 2404 2.320 2.241 2166 2096 2.864 2.745 2635 2.532 2436 2.345 3498 3.326 3.167 3.020 2885 2.759 2.643 2534 2.168 3812 3.605 3416 3242 3,083 2.937 2802 2.677 2263 4.078 3.837 3.619 3.421 3.241 1076 2.925 2.786 2331 4.303 4.031 3.786 3.566 3.366 3.184 2019 2.868 2379 4.494 4.192 3923 3682 3465 3.299 3.092 2.930 2414 4.656 4.327 4.005 3776 3.543 3.335 3.147 2.978 2.438 5.197 4763 4.439 4.127 3.851 3.506 3.387 3.190 5342 4.910 4533 4.200 3912 1056 3427 3223 8.002 5.468 4611 4265 3.962 3.095 3459 3249 3.061 4.675 4.315 4.001 2726 3.483 3268 3.075 6205 5.162 4.730 4.357 4.033 3.751 3.503 3.283 3.088 6.373 5749 5222 4775 4.391 4.059 3771 3.518 1295 3.097 6.467 5.818 5273 4.812 4419 4.080 3786 3529 3.104 3.304 6.550 5.877 5.316 4843 4.442 4.097 3.799 3311 6.623 5929 5353 4.870 4.460 4.110 3.808 3546 6.687 5973 5384 4.891 4476 4.121 1816 3.551 1220 4.130 3822 3556 3323 4.137 3827 3.550 1325 6.073 4140 1801 1562 3327 6.097 5.467 4.548 4.514 4.147 3834 3.564 1329 6.118 5.480 4.956 4520 4.151 3.837 3.566 3.330 6.136 5492 4.964 4.524 4.154 3839 3567 1301 6.152 5.502 4.970 4528 4.157 3840 3.568 3.331 6.166 5.510 4975 4.531 4.159 3.841 3.569 3332 6.177 5.517 4.979 4.534 4.160 3.842 1.569 6.215 5.539 4.992 4.541 4.164 3.845 3571 3333 6233 5.548 4.997 4544 4.166 3845 3571 3333 0769 0.758 0714 1.361 1.331 1.224 2 1.816 1.766 1.589 3 1.849 4 2035 5 6 3013 2456 12 3.040 2.469 13 2.478 14 2.484 15 2.489 16 2492 2494 18 17 3539 3.109 2.496 19 3316 3302 3113 2.497 20 3116 2.498 21 3.118 2.498 22 3.120 2.499 23 3.121 2.499 24 3.122 2.499 25 3123 2.500 26 3.123 2.500 27 1124 2.500 28 3.124 2.500 29 3124 2500 30 3125 2500 35 3.125 2500 40 "Paige at the end of each penod