1. A hospital network is planning to acquire an MRI machine at a cost of $2,100,000. The planning horizon is taken as five years. It is assumed that the salvage value would be zero at the end of those five years. It is estimated that the number of scans for these five years would be 2000, 2500, 3000, 3000 and 3000 respectively. Average net revenue per scan (revenue variable cost) is estimated to be $300. Fixed cost is assumed to be $50,000 per year.

Assume a time value of 6% for all the revenue and cost flows. Find out the Net Present Value for the MRI machine.