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 oye testing machine at a cost of $110,000. No terminal disposal value is expected. City Hospital's required rate of return is 14%. Assume al cash flows occur at year and 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 Future Value of Annuity of $1 factors.) (Click the icon to view the Present Value of $1 factors.) (Click the icon to view the Present Value of Annuity of $1 factors.) Read the requirements RUYURTHER N 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 $ 9446 b. Payback period (Round your answer to two decimal places) The payback period is 4.80 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 because the disposal value results in an increase in the total present value of cash inflows not change because the disposal value does not affect cash flows until the end of year 10. Compound Amount of $1.00 (The Future Value of $1.00) S = P11 + 1. In this table P = $1.00 20% 25% 20% 14% 1.140 1.300 1.482 1.689 1.925 2195 2.502 2853 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 1.240 1.538 1.907 2.364 2.932 3.713 4.300 Periods 2% 4% 6% % 10% 12% 1 1.020 1.040 1.060 1.080 1.100 1.120 2 1.040 1.082 1.124 1.166 1.210 1.254 3 1.061 1.125 1.191 1.260 1.331 1.405 4 1.082 1.170 1.262 1.360 1.464 1.574 5 1.104 1.217 1.338 1.469 1.611 1.762 6 1.126 1.265 1.419 1.587 1.772 1.974 7 1.149 1.316 1.504 1.714 1.949 2.211 8 1.172 1.369 1.594 1.851 2.144 2.476 9 1.195 1.423 1.689 1.9992 358 2773 10 1.219 1.480 1.791 21592.594 3.106 11 1.243 1.5391.898 2.332 2.853 3.479 12 1.268 1.601 2012 2.518 3.138 13 1.294 1665 2.133 2720 3.452 4.363 14 1.319 1.732 2261 2.937 3.797 4.887 15 1.346 1.801 2397 3.172 4.177 5.474 16 1.373 1.87325403.426 4.595 6.130 17 1.400 1.918 2693 3.700 5.054 6.866 18 1.428 2.026 2854 3.996 5.560 7.690 19 1.457 2.107 3.026 4.316 6.116 8.613 20 1.486 2.191 3.207 4.661 6.7279.646 A ER MAAR 16% 1.160 1.346 1.561 1.811 2.100 2.436 2.826 3.278 3.803 4411 5.117 5.936 6.886 7.988 9.266 10.748 12.468 14.463 16.777 19.461 3.707 4226 4.818 5.492 6.261 7.138 8.137 9.276 10.575 12.056 13.743 18% .180 1.392 1.543 1.939 2288 2700 3.185 3.759 4435 5234 6.176 7 .288 8.599 10.147 11.974 14.129 16.672 19.673 23.214 27.393 1220 1.488 1.816 2215 2.703 3.297 4.023 4.908 5.987 7.305 8.912 10.872 13.264 16.182 19.742 24.086 29.384 35.849 43.736 53.358 5.160 6.192 7.430 8.916 10.699 1 2.839 15.407 18.488 22.186 26.623 31.948 38.338 1.260 1.589 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 40.358 50.851 64.072 80.731 101.721 3.635 4.508 5.590 6.931 8.594 10.657 13.215 16,386 20.319 25.196 31.243 38.741 48.039 59.568 73.864 3.896 1.280 1.638 2.097 2.684 3.436 4.399 5.529 7.206 9.223 11.806 15.112 19.343 24.759 31.691 40.565 51.923 66.461 85.071 108.890 139.380 1.300 1.320 1.690 1.742 2.197 2.300 3.036 4.007 4.827 5.290 6.275 6.983 8.157 9.217 10.604 12.166 13.786 16.060 17.922 21.199 23.298 27.983 30.288 36.937 39.374 48.757 51.186 64.359 66.542 84.954 86.504 112.139 112.455 146.192 195,391 190.050257.916 Print Print Done Done Present Value of Annuity $1.00 in Arrears P, 1- 1 Periods % % % 10% 10% 10% 10% in 0.893 1.690 2.402 3.037 3.605 0.877 1.647 2.322 2.914 0.862 1.605 2.246 2.798 0.980 1.942 2884 3.808 4.713 5.601 6.472 7.325 8.162 0.769 1.361 1.816 0.794 1424 1.923 2.320 2.635 2.085 0.781 1.392 1.868 2241 2.532 2.750 1.331 1.766 2.096 2345 2534 2877 4.564 0.962 0.943 0.926 0.909 1.886 1.833 1.783 1736 2.775 2673 25772487 3.630 3.465 3.312 3.170 4452 4.212 3.993 3.791 5.242 4.917 4.623 4355 6.002 5.5825.206 6.733 6.210 5.747 5.335 7435 6,802 6.247 5.759 8.111 7.360 6.710 6.145 8.760 7.887 7.139 6.495 9.3858.384 7.536 6,814 9.986 8.853 7.904 7.103 10.563 9.295 8.244 7367 11.118 9.712 8.559 7.606 11.652 10.106 8.851 7.24 12.166 10.477 9.122 12.659 10.828 9.372 13.134 11.158 9.504 8.365 119.787 12 10.575 13 11.348 14 12.106 15 12.849 16 13.578 17 14.292 18 14.992 19 15.678