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Hospital estimates it can save $ 27,500 a year in cash operating costs for the next 10 years if it buys a special purpose eye
Hospital estimates it can save $ 27,500 a year in cash operating costs for the next 10 years if it | |||||||||||||
buys a special purpose eye testing machine at a cost of $ 195,000 . No terminal disposal value end of tenth year is | |||||||||||||
expected. Hospital required rate of return is 8%. Assume all cash flows occur at year end except | |||||||||||||
for initial investment amounts | |||||||||||||
Required: Calculate the following 10 pts each : | |||||||||||||
a) Net Present Value | |||||||||||||
b) Payback period | |||||||||||||
c) Internal Rate of Return | |||||||||||||
d) Accrual Accounting Rate of Return | |||||||||||||
FOR EACH OF THE ABOVE STATE WHETHER PROJECT SHOULD BE ACCEPTED | |||||||||||||
OR REJECTED |
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