Question: Company XYZ is considering the purchase of a $500,000 MRI machine this year (Year 0).Having the machine will generate additional net income per year as

Company XYZ is considering the purchase of a $500,000 MRI machine this year (Year 0). Having the machine will generate additional net income per year as follows... Year 1 = $75,000, Year 2 = $95,000, Year 3 = $100,000, Year 4 = $150,000, and Year 5 = $175,000. XYZ could earn 4% if instead the upfront costs were invested as part of its portfolio.

1) What is the NPV of the purchase? Should the purchase be made?

2) What is the IRR of the purchase?

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