Operating Cash Flows

A local dentist is considering the purchase of a new laser that uses state-of-the-art technology to painlessly perform root canals and remove cavities. The 
initial investment is $200,000 and the dentist hopes the laser will NOT become 
obsolete for six years. She expects to increase the volume of patients in her 
office because not only is the laser painless, it is fast. Cash flows are expected to 
be $60,000 for the first two years, $75,000 for the next two years, and $90,000 
for the final two years of the life of the asset. The dentist requires a 7.5% return 
on dental equipment.
A). Identify the reasons you think the operating cash flows might increase over 
the life of the asset. 
B) Determine the net present value of the laser. 
C) State the accept/reject decision and justify your answer beyond the sign of the 
NPV. 
D) Determine the net present value of the laser if the initial investment increases 
to $250,000.