Question
Scotia Family Health Team is investigating purchasing an ultrasound machine for use in its patient clinic. The machine would cost $133,800, including invoice cost, freight,
Scotia Family Health Team is investigating purchasing an ultrasound machine for use in its patient clinic. The machine would cost $133,800, including invoice cost, freight, and the training of employees to operate it. Scotia has estimated that the new machine would increase the companys cash flows, net of expenses, by $25,000 per year. The machine would have a twenty-year useful life with no expected salvage value. (Ignore income taxes.)
(Hint: Use Microsoft Excel to calculate the discount factor(s).)
Required:
1.Compute the machines IRR.(Do not round intermediate calculations and round your final answer tonearestwhole number.)
2.Compute the machines net present value. Use a discount rate of 18%.(Do not round intermediate calculations and round your final answer to the nearest dollar amount.)
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