A hospital wants to buy a new MRI machine for $400,000. The annual revenue from the machine is estimated at $110,000 per year while maintenance costs per year are calculated to be $20,000. The salvage value at the end of the machine s five-year operational life is $100,000. You have been asked to determine the IRR of this project and to make a recommendation regarding the proposed purchase. The hospital s MARR is 20% per year.
A hospital wants to buy a new MRI machine for $400,000. The annual revenue from the machine is estimated at $110,000 per year while maintenance costs per year are calculated to be $20,000. The salvage value at the end of the machine s five-year operational life is $100,000. You have been asked to determine the IRR of this project and to make a recommendation regarding the proposed purchase. The hospital s MARR is 20% per year.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A hospital wants to buy a new MRI machine for $400,000. The annual revenue from the machine is estimated at $110,000 per year while maintenance costs per year are calculated to be $20,000. The salvage value at the end of the machine s five-year operational lfe is $100,000. You have been asked to determine the IRR if this arciect and 4 make 3 recommendabion resardiw the aropases purchase: The hospital 5 MARI L 200 per vesr:
Transcribed Image Text:A hospital wants to buy a new MRI machine for $400,000. The annual revenue from the machine is estimated at $110,000 per year while maintenance costs per
year are calculated to be $20,000. The salvage value at the end of the machine s five-year operational life is $100,000. You have been asked to determine the IRR
of this project and to make a recommendation regarding the proposed purchase. The hospital s MARR is 20% per year.
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