Considerations might be important to the mri decision

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Reference no: EM132059496

The RADIOLOGY DEPARTMENT Of St. St joseph’s hospital , a not for profit is considering purchasing a magnetic resonance (MRI) machine. The cost of the machine to purchase and install is approximately $2,000,000. Assume St Josephs would like a minimum 8 percent return and the economic life of the machine is expected to have a life of 10 years. The machine has no salvage value.

If the MRI is installed, the cash flows are expected to increase by $300,000 per year.

Required

A. Find the NPV of the MRI

B. Should the hospital acquire the MRI

C. What nonfinancial considerations might be important to the MRI DECISION?

Reference no: EM132059496

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