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Question #6 Rochester Radiology is evaluating the purchase of a new radiology suite. Rochester Radiology is a not-for profit, non-taxable, entity. The following data is
Question #6 Rochester Radiology is evaluating the purchase of a new radiology suite. Rochester Radiology is a not-for profit, non-taxable, entity. The following data is relevant for their decision making process. Initial cash cost of the radiology suite: $2,750,000 Assume the cost of capital (discount rate) is equal to: 8% Projected revenue cash flows Projected expense cash flows Year 1 $ 2$ 3 $ 4 $ 5 $ 1,200,000 1,175,000 1,425,000 1,375,000 1,425,000 A A A A A (600,000) (615,000) (625,000) (675,000) (695,000) TTL $ 6,600,000 $ (3,210,000) Annual equipment depreciation is 110,000 per year and the equipment will be sold at the end of 5 years for an estimated>>> Please calculate the NPV, IRR, and payback year for this capital investment. Net present value>>> Internal rate of return (IRR)>>> 100 Payback year>>> Show your calculations below
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