Health care informatics professionals potentially will have involvement in submitting capital investment requests at some point in their career. To be able to prepare a solid financial case for such an acquisition/investment request will improve the chances of the request receiving support and ultimately approval.

Your director has tasked you to prepare a net present value (NPV) analysis to replace your picture archiving and communication system (PACS) with a new system (using the below financial inputs):

1. Initial investment amount = $1,500,000

2. Annual revenues = $1,250,000

3. Annual cash operating expenses = $50,000

4. Annual depreciation = $300,000 (5 years)

5. Salvage value = $0

6. Cost of capital = 8%

Once the NPV is complete - prepare a brief narrative describing your recommendations.