The firm wants to earn at least 12 on its investment


Treasure Valley Medical Associates are considering the purchase of a new portable mammogram machine and bus for $2,500,000. The unit is expected to have a five year life and can be sold for $100,000 at the end of five years. They presently have a portable unit that can be sold for $50,000. It is expected the new unit will generate $1,200,000 of revenue in the first year, and revenue is expected to increase by 10% each year in years 2 through 5. Fixed costs are budgeted to be $500,000 per year and variable costs are estimated to be 10% of revenues. The firm wants to earn at least 12% on its investment.

Compute the net present value of the project.

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Basic Computer Science: The firm wants to earn at least 12 on its investment
Reference No:- TGS02491899

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