Health Care Systems of the South is about to buy an expensive piece of diagnostic equipment. The company estimates that it will generate uniform revenues of $250,000 for each of the next eight years. What is the present value of this stream of earnings, at an interest rate of 7%? What is the net present value if the machine lasts ten years, not eight? If the equipment cost $1,500,000, should the company purchase it?

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The Answer of Health Care Systems of the South is about to buy an expensive piece of diagnostic equipment. The company estimates that it will generate uniform revenues of $250,000 for each of the next eight years. What is the present value of this stream of earnings, at an interest rate of 7%? What is the net present value if the machine lasts ten years, not eight? If the equipment cost $1,500,000, should the company purchase it?

Health Care Systems of the South Is About to Buy