Styles Q3) (Capital budgeting methods) (25 Marks) City Hospital, a nonprofit organization, estimates that it can save $28,000 a year in cash operating costs for the next 10 years if it buys a special purpose eye testing machine at a cost of $110,000. No terminal disposal value is expected. City Hospital's required rate of return is 14%. Assume all cash flows occur at year-end except for initial investment amounts. City Hospital uses straight-line depreciation. Required: 1. Calculate the following for the special-purpose eye-testing machine: a. Net present value I b. Payback period c. Internal rate of return 2. What other factors should City Hospital consider in deciding whether to purchase the special-purpose eye-testing machine? 3. What concept must be considered when looking at cash flows over several years for a long-term investment. Explain 4. What is the weakness of the cash payback approach? tech