Huntington Medical Center purchased a used lowfield MRI scanner 2 years ago for $445,000. Its operating cost is $272,000 per year and it can be sold for $150,000 anytime in the next 3 years. The Center’s director is considering replacing the presently owned MRI scanner with a state-of-the-art 3 Tesla machine that will cost $2.2 million. The operating cost of the new machine will be $340,000 per year, but it will generate extra revenue that is expected to amount to $595,000 per year. The new unit can probably be sold for $800,000 three years from now. You have been asked to determine how much the presently owned scanner would have to be worth on the open market for the AW values of the two machines to be the same over a 3-year planning period. The Center’s MARR is 20% per year.
Huntington Medical Center purchased a used lowfield
MRI scanner 2 years ago for $445,000. Its
operating cost is $272,000 per year and it can be
sold for $150,000 anytime in the next 3 years. The
Center’s director is considering replacing the presently
owned MRI scanner with a state-of-the-art 3
Tesla machine that will cost $2.2 million. The operating
cost of the new machine will be $340,000
per year, but it will generate extra revenue that is
expected to amount to $595,000 per year. The new
unit can probably be sold for $800,000 three years
from now. You have been asked to determine how
much the presently owned scanner would have to
be worth on the open market for the AW values of
the two machines to be the same over a 3-year
planning period. The Center’s MARR is 20%
per year.
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