Question: MGH is considering purchasing a new MRI scanner at a purchase price of $300,000. The MRI has a useful life of 10 years, after which
MGH is considering purchasing a new MRI scanner at a purchase price of $300,000. The MRI has a useful life of 10 years, after which the machine has no salvage value. Operating revenue is projected to be $200,000 per year, and operating costs are estimated to be $50,000 per year. The above data is summarized in the following table:
| Year | 0 | 1 | ... | 10 |
|---|---|---|---|---|
| Capital Expenditure | 300,000 | ... | ||
| Operating Revenue | 200,000 | ... | 200,000 | |
| Operating Cost | 50,000 | ... | 50,000 |
MGH is a hospital and is therefore tax-exempt. Assume the risk-adjusted discount rate is 10%. What is the NPV of the project? (Note: Do not include commas in your answer.)
NPV = $_____
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