teckno lab nonprofit? organization, estimates that it can save $30,000 a year in cash operating costs for the next 99 years if it buys a? special-purpose eye-testing machine at a cost of $ 150,000. No terminal disposal value is expected. 'Techno Labs' required rate of return is 12?%. Assume all cash flows occur at? year-end except for initial investment amounts. Techno Labs uses? straight-line depreciation

Calculate the following for the? special-purpose eye-testing?machine:

a.

Net present value

b.

Payback period

c.

Internal rate of return

d.

Accrual accounting rate of return based on net initial investment

e.

Accrual accounting rate of return based on average investment

2.

Requirement 1. Calculate the following for the? special-purpose eye-testing?machine:

a. Net present value? (NPV) ?(Use factors to three decimal? places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole?dollar.)

The net present value is $

.

b. Payback period ?(Round your answer to two decimal? places.)

The payback period is

years.

c. Internal rate of return ?(Round the rate to two decimal? places, X.XX%.)

The internal rate of return (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, X.XX%.)

The accrual accounting rate of return (AARR) is

% based on net initial investment.

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, X.XX%.)

The accrual accounting rate of return (AARR) is

% based on average investment.

Requirement 2. What other factors should Techno LabsTechno Labs consider in deciding whether to purchase the? special-purpose eye-testing? machine?

A.

Qualitative? factors, such as the benefits to its customers of a better?eye-testing machine and the? employee-morale advantages of having? up-to-date equipment.

B.

Quantitative financial aspects.

C.

Financing? factors, such as the availability of cash to purchase the new equipment.

D.

All of the above.

E.

None of the above. Using all four of the capital budgeting methodologies from requirement 1 will give management sufficient information to determine whether or not an investment in the?eye-testing machine meets the organzation goals of the company.

What other factors should

Techno LabsTechno Labs

consider in deciding whether to purchase the? special-purpose eye-testing?machine?