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You are considering buying a new laboratory blood analysis system that will require an initial outlay of $80,000. The system has an expected useful life
You are considering buying a new laboratory blood analysis system that will require an initial outlay of $80,000. The system has an expected useful life of 5 years and will generate free cash flows to the hospital as a whole of $15,000 at the end of each year over its 5 year life. In addition, the salvage value of the system is expected to be $10,000 based on current market conditions. Given a required rate of return of 12 percent, determine the following:
[a] Payback Period |
[b] NPV |
[c] IRR |
[d] Should this project be accepted? |
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