Medical center is considering purchasing two new types of equipment for their medical centers: new exercise and rehabilitation equipment. Each purchase will necessitate an initial investment of 850,000. Both proposed types of equipment have an expected life of five years, no projected salvage value, and provide net cash flows as follows:

Year	Exercise	Rehabilitation
1	300,000	200,000
2	300,000	200,000
3	300,000	200,000
4	200,000	300,000
5	100,000	375,000

Complete the following in Excel.

1. Compute the Net Present Value (NPV) of each proposal, assuming a required rate of return of 12 percent.

5. Assume that the medical center is required to pay income taxes at a rate of 21%, and that the cash flows listed above are pretax cash flows. The company uses straight line depreciation. Recompute the NPV of the exercise equipment.