Question
Spiro Hospital is investigating the possibility of investing in new dialysis equipment. Two local manufacturers of this equipment are being considered as sources of the
Spiro Hospital is investigating the possibility of investing in new dialysis equipment. Two local manufacturers of this equipment are being considered as sources of the equipment. After-tax cash inflows for the two competing projects are as follows:
| Year | Puro Equipment | Briggs Equipment |
|---|---|---|
| 1 | $320,000 | $120,000 |
| 2 | 280,000 | 120,000 |
| 3 | 240,000 | 320,000 |
| 4 | 160,000 | 400,000 |
| 5 | 120,000 | 440,000 |
Both projects require an initial investment of $560,000. In both cases, assume that the equipment has a life of 5 years with no salvage value.
Round present value calculations and your final answers to the nearest dollar.
1. Assuming a discount rate of 9%, compute the net present value of each piece of equipment.
| Line Item Description | Amount |
|---|---|
| Puro equipment: | |
| Briggs equipment: | THIS IS THE ONE I NEED |
Hello! I can't seem to find the NPV of Briggs equipment.
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Audits
Authors: Arthur E Cutforth
1st Edition
1017097445, 978-1017097443
