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Question 1 A hospital is considering purchasing a new medical dispensing cabinet that will cost $200,000. It believes that this cabinet will reduce the number of expired medications and medical errors, resulting in a savings of $43,823 per year for the next 7 years that the machine will be used.

Question 1 A hospital is considering purchasing a new medical dispensing cabinet that will cost $200,000. It believes that this cabinet will reduce the number of expired medications and medical errors, resulting in a savings of $43,823 per year for the next 7 years that the machine will be used.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Question 1 A hospital is considering purchasing a new medical dispensing cabinet that will cost $200,000. It believes that this cabinet will reduce the number of expired medications and medical errors, resulting in a savings of $43,823 per year for the next 7 years that the machine will be used. Question a: In this question, we have a investment. O Non-simple Simple Question b: What is the IRR of this investment? Round your percentage to the nearest integer. For example, if you get 11.1%, input 11; if you get 11.8%, input 12. Question c: If the hospital's MARR is 8%, should they invest in this cabinet? O No O Yes
Transcribed Image Text:Question 1 A hospital is considering purchasing a new medical dispensing cabinet that will cost $200,000. It believes that this cabinet will reduce the number of expired medications and medical errors, resulting in a savings of $43,823 per year for the next 7 years that the machine will be used. Question a: In this question, we have a investment. O Non-simple Simple Question b: What is the IRR of this investment? Round your percentage to the nearest integer. For example, if you get 11.1%, input 11; if you get 11.8%, input 12. Question c: If the hospital's MARR is 8%, should they invest in this cabinet? O No O Yes
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