You are the Administrative Director of the Operating Room (OR) at a large hospital within a national healthcare system.
The OR recently hired a new General Surgeon. Upon review of the existing imaging devices, he requested an
acquisition of the following two pieces of medical equipment:
i. A new mobile 16-slice CT Scanner (CT = Computed Tomography; CAT = Computerized Axial Tomography)
ii. A refurbished PET Scanner (PET = Positron Emission Tomography)
The following are the financial data that you have compiled concerning these two scanners:
(1) Available capital for the projects is $750,000;
(2) The interest rate used to discount cash flows is 6%.
(3) The CT Scanner's total acquisition, shipping and installation cost is $365,500. It has a 10-year useful life with no salvage value at the end of Year 10.
It can generate the following net cash flows from Year 1 to Year 10:
	Yr	Net Cash flow
	1	$ 260,000
	2	$ 520,000
	3	$ 520,000
	4	$ 416,000
	5	$ 416,000
	6	$ 416,000
	7	$ 468,000
	8	$ 468,000
	9	$ 520,000
	10	$ 390,000
(4) The refurbished PET Scanner's total acquisition, shipping and installation cost is $699,500. It has a 7-year useful life with no salvage value at the end of Year 7.
It can generate the following net cash flows from Year 1 to Year 7:
	Yr	Net Cash flow
	1	$ 312,000
	2	$ 312,000
	3	$ 436,800
	4	$ 520,000
	5	$ 520,000
	6	$ 572,000
	7	$ 416,000
Complete the following items based on the available financial data:
1. Determine Project CT's and Project PET's respective Payback Period (PP), Net Present Value (NPV), Profitability Index (PI)
and Internal Rate of Return (IRR) by presenting detailed calculations.
2. Given the capital constraints, which scanner would you decide to acquire?