Net Present Value and Competing Projects For discount factors use Exhibit 12B.1 and Exhibit 12B.2...
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Net Present Value and Competing Projects For discount factors use Exhibit 12B.1 and Exhibit 12B.2 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: Puro Equipment $320,000 280,000 240,000 160,000 120,000 Briggs Equipment $120,000 120,000 320,000 400,000 440,000 Year 4 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. Required Round present value calculations and your final answers to the nearest dollar. 1. Assuming a discount rate of 16%, compute the net present value of each piece of equipment. Puro equipment: Briaos enuinment
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