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Keating Hospital is considering two different low-field MRI systems: the Clearlook System and the Goodvilew System. The projected annual revenues, annual costs, capital outiays, and
Keating Hospital is considering two different low-field MRI systems: the Clearlook System and the Goodvilew System. The projected annual revenues, annual costs, capital outiays, and project life for each system (in after-tax cash flows) are as follows: Assume that the cost of capital for the company is 8 percent. The present value tebles provided in Exhibit 190 : 1 and Exhibit 198.2 must be used to solve the following problems: 3. What if Keating Hospital wants to know why IRR is not being used for the investment analysis? Calculate the IRR for each project. Round the discount factor to three decimal places, Round the IRR to the nearest whole percentage value (for example, 10.6% rounds to 114 and should be entered as " 11 " in the answer bex) Why IRR is not suitable for choosing among these mutually exclusive investments. IRR does not consider all the cash returns provided by the project
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