Calculate the payback the npv and the profitability index

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Santa Cruz Community hospital is considering investing $90,000 in new laundry equipment to replace its present equipment which is completely depreciated and outmoded an alternative to this investment is a long term contract with a local firm to perform the hospital's laundry service it is expected that the hospital would save $20,000 per year in operating costs if the laundry service was performed inteernally both the expected life and the depreciable life of the projected equipment are 6 year salvage value of the present equipment is expected to be zero assuming that santa cruz community hospital can borrow or invest money at 8% calculate the payback the NPV and the profitability index lgnore any reimbursement effects .

Reference no: EM131317402

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