This assignment has two parts:
Southeast General Hospital is considering investing $95,000 in new dietary equipment to replace its present equipment, which is completely depreciated and outdated. An alternative to this investment is a long-term contract with a local firm to perform the hospital’s dietary service. It is expected that the hospital would save $20,000 per year in operating costs if the dietary service was performed internally, versus contracting it out. Both the expected life and the depreciable life of the projected equipment are 6 years. Salvage value of the present equipment is expected to be zero. Assuming that Southeast General Hospital can borrow and invest money at 8%, calculate the payback period.
Please show your work for this calculation and label it properly.
2. Identify and describe the four stages of the capital decision-making process according to your textbook.
(Your written assignment should be at least two pages in length, double spaced, 12 font with the appropriate heading, introduction, body, conclusion, and references).
DUE TONIGHT 11:30 NEW YORK CITY TIME
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