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: Year 1 2 3 4 5 Puro Equipment $320,000 280,000 240,000 160,000 120,000 Briggs Equipment $120,000 120,000 320,000 400,000 440,000 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 12%, compute the net present value of each piece of equipment. Puro equipment: Briggs equipment: 2. A third option has surfaced for equipment purchased from an out-of-state supplier. The cost is also $560,000, but this equipment will produce even cash flows over its 5- year life. What must the annual cash flow be for this equipment to be selected over the other two? Assume a 12% discount rate.

Net Presens Value and Competing Projects For Gscount factors use Exhibit 128.1 and Gahibit 128.2 . Spiro Hospital is investigating the posebility of investing in new diblysis equipment. Two local manufacturers of this equipment are being considered as sources of the equipment. After-tax cash infows for the two competing projects are as follows: Both proyects require an initial imvestment of \\( \\$ 560,000 \\). In both cases, aspume that the equpment has a life of 5 years with no salvage value. Required: Round present value calculations and your final answers to the nearest doliat. 1. Nssuming a discount rate of \12, compute the net present value of each piece of equipment. Puro equipment: Brigas equigment: 2. A thind option has surfaced for equioment purchased from an out-of-stote supplies. The cont is also \\( \\$ 560,000 \\), but this equipment will produce even cash fiows over its 5 . vear life. Whot must the annual cash fow be for this equipment to be selected over the other twat Assume a 12 th ciscount rate. Spliro Hospital is investigating the possibility of investing in new dialysis equipment. Two local manufacturers of this equapment are being consudered as sources of the equipment: After-tax cosh inflows for the two competing projects are as follows: Both projects require an inibal investment of \\( \\$ 560,000 \\). in both cases, assume that the equipment has a life of 5 years wath no saivage value Required: Round present value calculations and your final answers to the nearest dollof 1. Assuming a discount tate of \12, compute the net present value of cach plece of equipment. Puro equigment: Briggs equipment: 2. A third option has surfaced for equipment purchased from an cut-0k-state supplier. The cost is also 1560,000 , but this equipment will produce even cash flows over its 5 vear life What must the amual cash fow be for this equipment to be selected over the other twol Assume a \12 discount rate. peryear