11-B2 NPV for Investment Decisions The head of the radiology department of St. Vincent's Hospital is considering the purchase of some new x-ray equipment. The cost is $400,000, the economic life is five years, and there is no terminal disposal value. Annual cash inflows from operations would increase by $140,000 and the required rate of return is 14%. There are no taxes. 1. Compute the net present value. 2. Should the hospital acquire the equipment? Explain