A hospital wants to buy a new MRI machine for $400,000. The annual revenue from the machine

Question:

A hospital wants to buy a new MRI machine for $400,000. The annual revenue from the machine is estimated at $110,000 per year while maintenance costs per year are calculated to be $20,000. The at the end of the machine's five-year operational life is $100,000. You have been asked to determine the IRR of this project and to make a recommendation regarding the proposed purchase. The hospital's is 20% per year.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...