Question
Memorial Hospital is considering the purchase of a new x-ray machine. Current interest rates are 10%. The hospital's managers forecast that the operation of the
Memorial Hospital is considering the purchase of a new x-ray machine. Current interest rates are 10%. The hospital's managers forecast that the operation of the new machine would produce the following stream ofrevenues(in thousandsof dollars) over 5 years in the future, wherenis the number of years in the future:
n = 0n = 1n = 2n = 3n = 4n = 5-$500$100$120$150$180$250
Assume the cost of the machine is $500,000 atn =0. What is the expectednet present valueof the x-ray machine, in thousands of dollars?
Group of answer choices
$2.64
-$3.26
$80.95
$104.32
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