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sys assume straight-line der in deciding wheter to purchase the new computer 21-18 Capital budgeting...

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Accounting

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sys assume straight-line der in deciding wheter to purchase the new computer 21-18 Capital budgeting methods, no income taxes. Cay Hospital, a nonprofit organization, estimates mat it can save $28,000 a year in cash operating costs for the next 10 years if it buys a special purpose eye- resting machine at a cost of $110,000. No terminal disposal value is expected. City Hospital's required rate of um is 14%. Assume all cash flow occur at year-end except for initial investment amounts. City Hospital uses straight-line depreciation. Calculate the following for the special-purpose eye-testing machine 4 a. Net present value b. Payback period Re C. Internal rate of return e. Accrual accounting rate of return based on average investment 2 What other factors should City Hospital consider in deciding whether to purchase the special-purpose eye-testing machine

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