Question
ippy Toe Spa Company offers various services, such as facials, laser hair removal and microdermabrasion. Currently, the company is considering purchasing the following spa equipment:
ippy Toe Spa Company offers various services, such as facials, laser hair removal and microdermabrasion. Currently, the company is considering purchasing the following spa equipment:
Laser Hair Removal MachinesMicrodermabrasion MachinesFacial Oxygen UnitsCost per Machine$66,100$30,100$24,000Annual Cash Inflow$125,300$213,700$39,100Annual Cash Outflow$88,400$198,100$26,900Required Rate of Return12%12%4%Useful Life4 years3 years3 yearsResidual Value$850$830$0Assume that each equipment's annual cash flow will occur for the period equal to its useful life. Do not enter dollar signs or commas in the input boxes. Use the present values tables in the textbook appendix. Use the negative sign for negative values. Round your answers to the nearest whole number. a) Determine the NPV of each piece of equipment. Laser Hair Removal Machine: $Answer Microdermabrasion Machine: $Answer Facial Oxygen Unit: $Answer b) For each piece of equipment, determine the maximum acceptable price using the NPV method. Laser Hair Removal Machine: $Answer Microdermabrasion Machine: $Answer Facial Oxygen Unit: $Answer c) Determine the payback period for each piece of equipment. Round your answers to 1 decimal place. Laser Hair Removal Machine: Answer Years Microdermabrasion Machine: Answer Years Facial Oxygen Unit: Answer Years
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