The board of management of Princess Ann Hospital wants to replace its existing equipment In the lab with a new automated machine. Five years ago Princess Ann Hospital purchased the existing equipment at a cost of $150,000. The hospital uses a straight-line method to depreciate Its equipment with a ten year expected life. Currently, the market value of old equipment is $73, 500. The new automated machine can be purchased for $250,000 Including installation and is expected to last the hospital 10-years. Over its 10-year life, it will reduce operating costs by $50,000 per year for the first 6 years and by $40,000 per year for the remaining 4 years. The hospital will be required to invest working capital requirements by $50,000 at the beginning of the replacement and this will be recovered at the end of the project. It Is estimated that the new machine can be sold at the end of its life for $60,000. The Hospital uses a 10% cost of capital and its acceptable payback period is 5 years. Evaluate the decision to acquire the equipment using both the NPV method and the payback method. Advise the management