Seattle Hospital, a taxpaying entity, estimates that it can save $23,000 a year in cash operating costs for the next 8 years if it buys a special-purpose eye-testing machine at a cost of $90,000. No terminal disposal value is expected. Seattle Hospital's required rate of return is 14%. Assume all cash flows occur at year-end except for initial investment amounts. Seattle Hospital uses straight-line depreciation. The income tax rate is 28% for all transactions that affect income taxes. Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements Requirement 1. Calculate the following for the special-purpose eye-testing machine: a. Net present value (NPR) (Round interim calculations and your final answers to the nearest whole dollar. Use a minus sign or parentheses for a negative net present value) The net present value is b. Payback period (Round your answer to two decimal places.) The number of years for the payback period is c. Internal rate of return (Round the rate to two decimal places, XXX%) The internal rate of roturn (IRR) is % d. Accrual accounting rate of return based on net initial investment (Round Interim calculations to the nearest whole dollar. Round the rate to two decimal places, XXX%) Based on the net initial investment, the accrual accounting rate of return (AARR) is 1 % e. Accrual accounting rate of return based on average investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, XXX%) Based on average Investment, the accrual accounting rate of retum (AARR) is %. Requirement 2. How would your computations in requirement 1 be affected if the special-purpose machine had a $13,000 terminal disposal value at the end of 8 years? Assume depreciation deductions are based on the $90,000 purchase cost and zero terminal disposal value using the straight-line method. Answer briefly in words without further calculations. NPV would because the disposal value Payback would because the disposal value IRR would because the disposal value AARR would because the disposal value under either method. Reference - X Present Value of $1 Periods 2% 4% Period 1 0.880 0.962 Period 2 0.961 0.925 Period 3 0.942 0.889 Perlod 4 0.924 0.855 Period 5 0.906 0.822 Period 6 0.888 0.790 Period 7 0.871 0.780 Period 8 0.853 0.731 Period 90.837 0.703 Period 10 0.620 0.676 Period 11 0.804 0.650 Period 12 0.788 0.625 Period 13 0.773 0.601 Period 14 0.758 0.577 Period 15 0.743 0.555 Period 16 0.728 0.534 Period 17 0.714 0.513 Period 18 0.700 0.494 Period 19 0.686 0.475 Period 20 0.673 0.450 Period 21 0.060 0.439 Period 22 0.647 0.422 Period 23 0 634 0.405 Period 24 0.022 0.300 Period 25 0.610 0.375 Period 26 0.598 0.361 Period 27 0.588 0447 Period 28 0.574 0.333 6% 8% 0.943 0.926 0.890 0.857 0.840 0.794 0.792 0.735 0.747 0.681 0.705 0.630 0.665 0.583 0.627 0.540 0.592 0.500 0.556 0.463 0.527 0.429 0.497 0.397 0.469 0.368 0.442 0.340 0.417 0.315 0.394 0.292 0.371 0270 0.350 0.250 0.331 0.232 0312 0.215 0.294 0.199 0.278 0.184 0.22 0.170 0247 0.158 0.233 0.146 0 220 0.135 0.207 0.125 0.195 0.116 10% 0.009 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0424 0.386 0.350 0.319 0.290 0.263 0.230 0.218 0.198 0.180 0.164 0.149 0.135 0.123 0.112 0.102 0.092 0.084 0.076 0.069 12% 16% 0.893 0.877 0.797 0.789 0.712 0.675 0.636 0592 0.567 0.519 0.507 0.450 0.452 0.400 0.404 0.351 0.361 0.300 0.322 0.270 0.287 0.237 0.257 0.200 0.229 0.182 0.205 0.160 0.183 0.140 0.163 0.123 0.146 0.108 0.130 0.095 0.116 0.083 0.104 0.073 0.093 0.064 0.083 0.056 0.074 0.00 0066 0.043 0.059 0.000 0.053 0.033 0.047 0.029 0.042 0.026 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0227 0.195 0.168 0.145 0.125 0.108 0.093 0.080 0.060 0.060 0.051 0.044 0.038 0.033 0.028 0.024 0.021 0.018 0.016 18% 20% 22% 24% 26% 28% 30% 32 40% Periods 0.347 0.833 0.820 0.800 0.794 0.781 0.760 0.758 0.714 Period 1 0.718 0.694 0.672 0.650 0.630 0.810 0.592 0.574 0.510 Period 2 0.609 0.579 0.551 0.524 0.500 0.477 0.455 0.435 0.366 Period 3 0.516 0.482 0.451 0.423 0.397 0.373 0.350 0.329 0.260 Perlod 4 0.437 0.402 0.370 0.341 0315 0291 0.269 0.250 0.186 Periods 0.370 0.335 0.303 0.275 0.250 0.227 0.207 0.189 0.133 Period 0.314 0.279 0.249 0.222 0.198 0.178 0.159 0.143 0.095 Perlod 7 0.266 0233 0.204 0.179 0.157 0.139 0.123 0.108 0.088 Period 8 0.225 0.194 0.167 0.144 0.125 0.108 0.094 0.082 0.048 Period 0.191 0.162 0.137 0.110 0.099 0.085 0.073 0.062 0.035 Period 10 0.162 0.135 0.112 0.094 0.079 0.000 0.056 0.047 0.025 Period 11 0.137 0.112 0.092 0.076 0.062 0,052 0.043 0.036 0.018 Period 12 0.116 0.003 0.075 0.001 0.050 0.040 0.033 0.027 0013 Period 13 0.099 0.078 0.062 0.049 0.039 0.032 0.025 0.009 Period 14 0.084 0.065 0.061 0.040 0.031 0.025 0.020 0.016 0.006 Period 15 0.071 0.054 0.042 0.032 0.025 0.019 0.015 0.012 0.005 Period 16 0.000 0.045 0.034 0.026 0.020 0.015 0.012 0.009 0.003 Period 17 0.051 0038 0.028 0.021 0.016 0.012 0.009 0.007 0.002 Period 18 0,043 0.031 0.023 0.017 0,012 0.009 0.007 0.005 0.002 Period 19 0.037 0.026 0.010 0.014 0.010 0.007 0.005 0.004 0.001 Period 20 0.031 0.022 0.015 0.011 0.008 0.006 0.004 0.003 0.001 Period 21 0.020 0010 0.013 0.0090.006 0.004 0.003 0.002 0.001 Period 22 0.022 0.015 0.010 0.007 0.005 0.003 0.002 0.002 0.000 Period 23 0.019 0.013 0.008 0.005 0.004 0.003 0.002 0.001 0.000 Period 24 0.010 0.010 0.007 0.005 0.003 0.002 0.001 0.001 0.000 Period 25 0.014 0.000 0.006 0.004 0.002 0.002 0.001 0.001 0.000 Period 26 0.011 0.007 0.005 0.003 0.002 0.001 0.001 0.001 0.000 Period 27 0.010 0.006 0.004 0.002 0.002 0.001 0.001 0.000 0.000 Period 28 0.021 Print Done Reference - X Present Value of Annuity of $1.00 in Arrears Periods 2% 4% 6% 8% 10% Period 1 0.980 0.902 0.943 0.920 0.909 Period 2 1.942 1.886 1.833 1.783 1.736 Period 3 2884 2.775 2673 2577 2.487 Period 4 3.808 3.630 3.465 3.312 3.170 Period 5 4.713 4.452 4.212 3.993 3.791 Period 6 5.601 5.242 4.917 4.623 4.355 Period 7 6.472 0.002 5.582 5.206 4.868 Period 8 7325 5.733 8.210 5.747 5335 Period 9 8. 162 7.435 6.802 6.247 5.750 Period 10 8.983 8.111 7.330 6.710 0.145 Period 119.787 5.750 7.887 7.139 6.495 Period 12 10.575 9.385 8.384 7.530 6,814 Period 13 11,348 9.986 8.853 7904 7.103 Period 14 12.108 10.563 9.295 8.244 Period 15 12.849 11.118 9.712 8.559 7.600 Period 16 13.578 11652 10.106 8.851 7.824 Period 17 14.292 12 166 10.477 9.122 8022 Period 18 14.902 12.659 10.828 9.372 8.201 Period 19 15.678 13.134 11.158 9.604 8.365 Period 20 16,361 13.590 11470 9.818 8.514 Period 21 17.011 14.020 11.764 10.017 8.849 Period 22 17.658 14.451 12.042 10.201 8.772 Period 23 18.292 14.857 12.303 10.371 8.883 Period 24 18.914 15.247 12.550 10.529 8.985 Period 25 19.523 15.622 12.783 10.875 9.077 Period 26 20.121 15 983 13.003 10.810 9.161 Period 27 20.707 16.330 13.211 10.935 9.237 Period 28 21 281 16.663 13.408 11.051 9.307 12% 0.893 1690 2.402 3.037 3.805 4. 111 4.564 4.960 5,328 5.650 5.938 0.194 6.424 6.628 6.811 6.974 7.120 7.250 7.300 7.489 7562 7.645 7.718 7.784 7.843 7.896 7.943 7.984 7307 14% 0.877 1.547 2322 2914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 0.002 0.142 6.265 6.373 6.467 6.550 6.623 6.687 6.743 6.792 6.835 6.873 6.906 6.935 6.981 16% 0.862 1.605 2246 2.798 3274 3.685 4.039 4344 4.607 4.833 5,020 5.197 5.342 5.468 5.575 5.668 5.749 5.818 5.877 5.929 5.973 6,011 5.044 6.073 0,097 6.118 6.136 6.152 18% 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4078 4.300 4.494 4.656 4.793 4.910 5.000 5.092 6.162 5.222 5 273 5.316 5.353 5.384 5.410 5.432 5.451 5.467 5.480 5,492 5.502 20% 0.833 1.528 2.106 2589 2.991 3.326 3.605 3837 4031 4.192 4327 4.430 4.533 4611 4.675 4.730 4.775 4,812 4.843 4.870 4.891 4.909 4.925 4.937 4.948 4.956 4.964 4.970 22% 0.820 1.492 2.042 2.494 2.864 3.167 3.410 3.619 3.786 3.923 4.035 4.127 4203 4.265 4.315 4.357 4.391 4419 4.442 4460 4.476 4.480 4.490 4,507 4.514 4.520 4.524 4.528 24% 0 ADG 1.457 1981 2404 2.745 3.020 3.242 3421 3.566 3.682 3.776 3.851 3.912 3.062 4.001 4,033 4.059 4,080 4,097 4.110 4.121 4.130 4.137 4.143 26% 28% 0.790 0.781 1.424 1.392 1.923 1.868 2320 2241 2635 2.532 2885 2.759 3.083 2.937 3.241 3.078 3.366 3.184 3.465 3.209 3.543 3.335 3.606 3.387 3.656 3427 3.695 3459 3.726 3.483 3.751 3.503 3.771 3.518 3.780 3,529 3.799 3.539 3.808 3.546 3.816 3.551 3.822 3.556 3.827 3.550 3.631 3562 3.834 3.564 3.837 3.566 3.839 3.567 3.840 3.568 30% 0.759 1.361 1816 2.166 2.436 2643 2.802 2.925 3.019 3.092 3.147 3.100 3223 3.249 3.268 3.283 3.295 3.304 3.311 3.316 3.320 3.323 3.325 3.327 3.329 3.330 3.331 3 331 32% 0.758 1.331 1786 2096 2.345 2.534 2.677 2.786 2.868 2.930 2.978 3.013 3.040 3.001 3.070 3.088 3.097 3.104 3.100 3.113 3.116 3.118 3.120 3.121 3.122 3.123 3.123 3.124 40% Periods 0.714 Period 1 1.224 Period 2 1.589 Period 3 1 849 Period 4 2.035 Period 5 2.168 Period 6 2.263 Period 7 2.331 Period 2379 Period 2414 Period 10 2.438 Period 11 2456 Period 12 2.400 Period 13 2.478 Period 14 2434 Period 15 24BD Period 16 2.492 Period 17 2.494 Period 18 2.496 Period 19 2.497 Period 20 2.498 Period 21 2.498 Period 22 2.499 Period 23 2.499 Period 24 2499 Period 25 2500 Period 26 2 500 Period 27 2.500 Period 28 4.151 4.154 4.157 Reference - Compound Amount of $1.00 (The Future Value of $1.00) Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% Period 1 10201040 1.060 1.080 1.100 1.120 1.140 1.160 1.180 1200 1220 1240 Period 2 1.040 1082 1.124 1.166 1210 1.254 1300 1,346 1.392 1.440 1488 1.518 Period 3 1061 1125 1.191 1.260 1331 1 405 1.482 1.561 1.643 1.720 1.816 1.907 Period 4 1082 1.170 1.262 1.350 1.464 1.574 1.689 1.811 1.939 2.074 2.215 2.364 Period 5 1.104 217 1.338 1.489 1.611 1.762 1.925 2.100 2288 2489 2.703 2.932 Period 6 1.125 1.265 1.419 1,587 1.772 1.974 2.195 2436 2700 2.96 3.297 3.635 Period 7 1.149 1316 1.504 1.714 1.940 2.211 2.502 2.826 3.185 3.583 4,023 4.508 Period 1.172 1360 1.594 1 851 2.144 2476 2.853 3278 3.759 4300 4.900 5.590 Period 9 1.195 1423 1.680 1.990 2350 2.773 3.252 3.503 4435 5.160 5.087 6831 Period 10 1 210 1480 1791 2.159 2594 3.100 3.707 4411 5.234 6.192 7.305 8.594 Period 11 1 243 1.530 1.800 23322853 3:470 4.226 5.117 6.176 7.430 012 10.657 Period 12 1.268 1.601 2012 2.518 3.139 3.890 4.818 5.900 7.250 8.910 10.872 13.215 Period 13 1 294 1665 2.133 2.720 3.452 4.363 5.402 6.886 8.500 10.690 13.264 16.386 Period 14 1.310 1.732 2201 2.937 3.797 4 887 7.988 10.187 12.830 16.182 20.310 Period 15 1340 1801 2307 3.172 4:177 5474 7.138 1.200 11 974 15,407 19.742 25.11 Period 16 1.373 1673 2540 3.420 4.505 6.130 1.137 10.740 14120 18.480 24.066 31243 Period 17 1400 1048 2093 3.700 5054 0.000 0.270 12 468 16.672 22.100 29.304 38 741 Period 18 1428 2020 2854 3.000 5.860 7.690 10.675 14463 10,673 20.023 35.049 48.000 Period 10 1457 2.107 3.026 4316 8.110 3.613 12050 16.777 23214 31.948 43.730 59.568 Period 20 1.400 2.191 3207 4.661 5.727 9.646 13.743 19.461 27 303 38.330 53358 73.864 Period 21 1.510 2.279 3400 5034 7.400 10.804 15.600 22.574 2324 46.005 65.090 91.592 Period 22 1.546 2370 3.604 5.437 8.140 12.100 17.861 26.185 38.142 55200 79.418 113.574 Period 23 1.677 2.465 3.820 5.871 8054 13 552 20.362 30.370 45 000 66.247 06.880 140.831 Period 24 1.000 2.563 4.040 6.341 0.850 15.170 23.212 35.238 53.100 70.497 110205 174 631 Period 25 1.641 2.666 4292 6.848 10.835 17.000 21462 40.874 62.680 06.390 144.210 216.542 Period 26 1.673 2772 4.549 730611918 19:00 30.107 47.454 7.140 114.475 175.930 268.512 Period 27 1.707 2883 4,822 7.8 13.110 21.325 34.390 55.000 87.260 137371 214 642 332 955 Period 28 1.749 2.999 5.112 8.627 14.421 23 884 39.204 63.300 102.967 164.845 261 854 412.864 6.281 26% 1.200 1.568 2000 2520 3170 4002 5.042 6.353 8.005 10.000 12.700 18.012 20.175 25 421 32.000 40.358 50.851 14.072 80731 101721 128.169 161.492 203480 256 25 323.045 407.037 $12.867 546,212 28% 1280 1838 2.097 2684 3.436 4396 5.629 7.2011 9.223 11.00 15.112 19.343 24.750 31.091 40.565 51.923 06:461 86.071 100.000 130 380 178.400 228 300 292 300 374 144 475.000 612.990 784 638 1004336 30% 32% 1300 1,320 1.680 1.742 2.197 2.300 2.856 3.036 3.713 4007 4827 5.290 5275 6.983 8.157 9.217 10.604 12.166 13.738 18.000 17.922 21.190 23. 200 27.983 30.288 36.937 30 374 48.757 51.180 54350 06 542 34954 06.504 112.135 112.456 148.024 146.192 105,39 190.050 257,916 247065 140.440 121.164 440,303 417.530 503.190 542 801 783.025 705641 1033 590 917.333 1364 339 1192533 1800.927 1550 293 2377.224 40% Periods Period 1 5.960 Period 2 2.744 Period 3.542 Period 4 5.378 Periods 7530 Period 10.541 Period 14.750 Period 20.000 Periodo 20.925 Period 10 40.490 Period 11 56 894 Period 12 79 371 Period 13 111.120 Period 14 155.500 Period 15 217.795 Period 10 304.13 Period 17 420.870 Period 10 597 630 Period 19 836.83 Period 20 1171 356 Period 21 163908 Period 22 2295 857 Period 23 3214.200 Period 24 4490.800 Period 25 6299.831 Period 20 8819.784 Period 27 12347670 Period 28 Print Done Reference - 1.000 1000 30% 1.000 2300 3990 4921 5.187 9.043 Compound Amount of Annuity of 51.00 in Armeans" (Future Value of Annuity) Periods2% 4% 0% 8% 10% 12% 14% 16% 18% 20% 22" 24% 26% 28% Period 11.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1000 1.000 1.000 1.000 Period 22.020 2040 2050 2080 2.100 2.120 2.140 2. 160 2.180 2.200 2.220 2240 2260 2280 Period 33.000 3.122 3.184 3.246 3310 3.374 3440 3.506 3.572 3.640 3.700 3.778 3. 3.918 Period 4 4.122 4.246 4375 4.506 4641 4.779 5.066 5215 5.368 5.524 5.634 5.848 6010 Period 5 5.204 5.416 5.6375.867.105 5.353 6.610 6.877 7.154 7.442 7.740 8.048 8.368 8.700 Period 8 6.308 0.633 6.975 7338 7.716 8.115 8,536 8.977 8.442 9.930 10:442 10.950 11.544 12136 Period 7 7.434 7.808 8.394 8.9239.487 10.000 10.730 11 414 12.142 12.916 13.740 14.815 15 546 16.594 Period 8 8.583 9.214 9.897 10.637 11.4312300 13.233 14.240 15 327 16.490 17.762 19.123 20.500 22.163 Period 9.756 10.583 11.491 12.488 13.579 14.77616085 17.519 19.086 20.700 22.670 24712 26.940 29.300 Period 10 10.950 12.000 13.181 14.487 15,937 17 549 19.337 21.321 23.521 25 959 28.657 31.643 34.945 38593 Period 11 12.169 13486 14.972 18.545 18.531 20.656 23.045 25.733 28.755 32.150 35962 40.230 45.031 50.308 Period 12 13.412 15.026 16870 18.977 21,384 24.133 27 271 30.850 34931 39.501 44,874 50.895 57.739 65.510 Period 13 14.680 10.027 18 882 21.495 24.523 28.029 32.000 36.786 42 219 48 497 55.746 14.110 73751 84 853 Period 14 15 974 18 292 21 015 24 215 27.975 32 390 37.581 43.672 50.818 59.100 69.010 10.406 93 920 109.612 Period 15 17 293 20.024 23 276 27,152 31 772 37 200 43.842 51.000 0.006 72.035 85.192 100.815 119.47 141 303 Period 16 18.639 21.826 25.673 30 324 35.950 42.753 50.98080.925 72.930 87 442 104.035 120.011 151.377 181.868 Period 17 20.012 23.098 28.213 33 750 40 545 40.884 59.110 75.673 67.068 105.31 129.020 157.253 191.735 233.791 Period 18 21.412 25.645 30.900 37 450 45 590 66.750 68.39484.141 103.740 120.117 8.40 195.94 242.585 300 252 Period 19 22 641 27 671 33.700 41.446 51.150 63.440 78.909 9.503 123.414 154.740 194254 244.030 306.650 385323 Period 20 24 297 29.778 36.786 45.762 57.275 72,052 01.025 115,300 146.628 106.688 237 900 303,601 387380 494213 Period 21 25 783 31.000 39993 50.423 64.002 01.090 104.768 134.641 174 021 225.000 291347 377 465 489.110 533 503 Period 22 27 299 34 24 43 502 55.467 71.403 92 503 120.438157,415 200345 271 001 350443 400.000 617 278 811.000 Period 23 28.145 30618 40.000 60.890 79.543 104.603 138.297 103.601 244 407 328 237 436.361 54230 778771 1040.350 Period 24 30.422 30003 50.818 66.765 68 497 118.156 160.650 213.078 209.404 302,464 532750 723461 982 251 1332.850 Period 25 32 030 41.640 54.605 73.106 98.347 133.334 181.871 240.214 342.003 471.08 650.006 898.002 1238.630 1706.303 Period 26 33 671 44312 50.15 70.954 100.102150,334 200 333 200.000 405 272 607 377 795.165 1114634 1501.602 2105.700 Period 27 35.3444706 63.700 87.351 121.100 160.374 238.400 337 502 479,221 68,653 071,102 1389.140 106.710 2706.700 Period 28 3706149.008 68.520 15399 134.210 100.000 272 800 392 503 500.401 010.223 1105.744 1716.10124615063583.344 12.756 17-583 23.858 32.015 42619 55.405 74,327 97.625 127.913 167286 218472 205014 371518 483 973 630.165 120 215 1067 200 1358.484 1801.003 2348 303 3054 444 3971778 5164311 32% 1.000 2.320 4062 5.362 9.398 13.400 18.696 25.670 34.800 47.062 63.122 84 320 112.303 14920 197997 262 350 347 309 459.440 807 472 802.560 1000.779 1401220 1850.622 2443 821 3228 844 4260 434 5624772 7425.690 40% Periods 1.000 Period 1 2400 Period 2 4.300 Period 3 7104 Period 4 10 940 Periodo 16.324 Periodo 23.853 Period 7 34 395 Period 49.153 Period 89 814 Period 10 98.730 Period 11 139.235 Period 12 195.929 Period 13 275 300 Period 14 306.420 Period 15 541.980 Period 16 759.784 Period 17 1014897 Period 10 1491.570 Period 19 2080200 Period 20 2925 889 Period 21 4007 245 Period 22 5737.142 Period 23 0002990 Period 24 11247100 Period 25 15747.079 Period 26 22040010 Period 27 30866.674 Period 28 Print Done