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.
This question was answered on: Jul 11, 2017
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