2. 9.27 Huntington Medical Center purchased a used low-field MRI scanner 2 years ago for $445,000. Its operating cost is $272,000 per year and it can be sold for $150,000 anytime in the next 3 years. The Center’s director is considering replacing the presently owned MRI scanner with a state-of-the-art 3 Tasle machine that will cost $2.2 million. The operating cost of the new machine will be $340,000 per year, but it will generate extra revenue estimated to be $595,000 per year. The new unit can probably be sold for $800,000 three years from now. You have been asked to determine how much the presently owned scanner would have to be worth on the open market for the AW values of the two machines to be the same over a 3-year planning period. The Center’s MARR is 20% per year. Use

(a) factors and

(b) a spreadsheet with GOAL SEEK to find the RV. Is the RV a reasonable market or trade-in amount?