Health & Medical question

Q1. Marshall Healthcare System, a non-taxpaying entity, is planning to purchase imaging equipment, including an MRI equipment, for its new imaging center. This equipment is expecting to generate the following cash flows.

Determine the payback for the new MRI machine and should the project be accepted or rejected? Explain

(2.5 Marks)

Years                    0                                    1                               2                        3                4                                 5

Initial            ($ 15,000,000)


Net operating

cash flows

                                                    $2,000,000        $4,000,000,        $5,000,000        $8,000,000       $16,000,000

Q2. Compare the Strengths and Weakness of Pay back method and NPV ( Net Present Value)   

( 2.5 Marks)



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