1. Southside Rehabilitation Center wants to buy a piece of equipment for $20,000 with projected cash flows of $8,000 per year during the equipment's six-year useful life. What is the IRR of the equipment?
2. Community Hospital wants to buy equipment for $30,000 with projected cash flows of $7,000 per year during the equipment’s six-year useful life. What is the payback period?
3. What is the present value of $125,000, discounted at 8 percent annually for 7 years?