Review the following information: My pharmacy plans to buy an Automated Dispensing Machine for dispensing medication at our location. This would be an investment of $250,000. It will cost $15K annually to service the machine. The paper and ink required to fill 3.5Million doses annually will cost $20K. The machine has a life expectancy of 10 years. Each unit dose dispensed by the pharmacy is billed at an average of 1 cent per dose to the medication cost. Which means, we get reimbursed $35K annually for packaging our drug in the automated dispensing machine. When we upgrade our machine after 10 years to another one, we are guaranteed $15K towards the new machine for our old one.
Then, calculate the NPV and IRR of the project. Based on your workings and assumptions, indicate whether you would accept the project, explaining why.