Reference no: EM132420453

Please help me solve this problem:

1. A healthcare system, a not-for profit hospital, is planning to buy an imaging center including MRI, x-ray, ultrasound, and CT. The new imaging center will generate $6 million per year in revenues for 5 years. The expected operating expenses, excluding depreciation, would increase expenses by 1.2 million per year for the next 5 years. The initial capital investment outlay for the project is $5.5 million, which will be depreciated on a straight line basis to a savage value. The savage value in years 5 is $800,000. The cost of capital for this project is 12%. How can I get the NPV in IRR of this problem?
2. A Medical Center which is a for-profit hospital, is considering the acquire a new CT Scanner. The cost of the new scanner is $4 million and will be depreciated over 10 years on a straight line basis to $0 savage value. The tax rate is 30%. The financing options include either borrowing the full cost of the scanner or leasing a scanner. The lease option is a five-year lease with equal before-tax lease payments of $950,000.00 per year. The borrowing alternative is a five-year loan covering the entire cost of the scanner at an interest rate of 5%. The after-tax cost of debt is 3%. Can you show me how to get the lease amount?