Net Present Value and Competing Projects For discount factors use Exhibit 14B-1 and Exhibit 14B-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 follo ws Year Puro Equipment 320,000 80,000 240,000 160,000 120,000 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 9%, 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 9% discount rate. 45,912 467,532 X 264,171per year