Question: A non-profit organization believes it can save $28,000 a year in cash operating costs for the next 10 years with the purchase of a custom-made machine that costs $110,000. This machine is expected to have a zero disposal value. The organization's rate of returns is 14%.
1. Explain and compute the payback period
2. Explain and compute the net present value (NPV)
3. Explain and compute the internal rate of returns (IRR)
4. Explain and compute the accounting rate of returns (ARR)
Using the Net Initial Investment with straight line amortization method.