excel only

A new instrument capable of performing 40,000 tests per year has a purchase price of $15,000,000. Installation will cost 10% of the purchase price. The manufacturer covers maintenance costs for the first year in the purchase price. Thereafter, it will cost $200,000 per year for a maintenance contract. Assume the following: The instrument will generate added test volume at a rate of 15,000 tests in the first year, and this amount will increase annually by 10,000 tests/year. You can charge $250 per test. Collection rate is 80%. You will be able to reduce the workforce by 10 FTEs, each of which is paid a salary of $50,000/year. The fringe benefits rate for workers is 20% of the salary. The hurdle rate for this opportunity is 7.0%. Use the data presented to determine: (1) benefit/cost ratio (2) the net present value (3) the average payback period for the proposed equipment acquisition. Then, decide whether the opportunity should be pursued and explain your reason(s).