Given the following data, complete the Cash Flow Analysis for Lehman Hospital:

Lehman Hospital is considering the purchase of a new MRI machine, which costs $3,000,000, with no salvage value and an expected life of five years. The MRI machine is expected to have fixed operating costs of $350,000 per year and variable operating costs of $10 per procedure. The equipment is expected to be used 20 times per day for 300 days a year, for each year of the life of the machine. The average billing price for one procedure is $100. All costs and revenues are expected to increase at a 5 percent inflation rate after the first year. The corporate cost of capital is 10%. (30 points)

(a)
	Year
	0	1	2	3	4	5
Equipment Cost
Net Revenues
Fixed Operating Costs
Variable Operating Costs
Net Operating Income
Equipment Salvage Value
Net Cash Flow
		NPV manual calculation.
Corporate Cost of Capital
NPV
IRR