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