Proposed acquisitions of new clinical laboratory test system

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You have been asked to evaluate the proposed acquisitions of a new clinical laboratory test system. The system’s price is $50,000, and it will cost another $10,000 for transportation and installation. The system is expected to be sold after three years because the laboratory is being moved at that time. The best estimate of the system’s salvage value after three years of use is $20,000. The system will have no effect on volume or reimbursement (and hence revenues), but it is expected to save $20,000 per year in operating costs. The not-for-profit business’s corporate cost of capital is 10%, and the standard risk adjustment is 4% points.

Reference no: EM13986352

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