Marshall Healthcare System is a for-profit entity and is planning to purchase an MRI and ultrasound equipment for its new imaging center. The equipment will generate $3,000,000 per year in revenues for the next (5) years. The expected operating expense, excluding depreciation, will increase expenses by $1,200,000 per year for the next (5) years. The initial capital investment outlay for the imaging equipment is $5,500,000 and will be
a. Compute the NPV and IRR to determine the financial feasibility of this project.
b. Should Marshall Healthcare system accept or reject this project based on financial feasibility? Enter ACCEPT or REJECT as your answer.
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