Answer the following compounding/discounting questions assuming year-end cash flows. St. Elsewhere Hospital purchased a DaVinci...
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Answer the following compounding/discounting questions assuming year-end cash flows. St. Elsewhere Hospital purchased a DaVinci Robotic System for $2.5 million dollars, using a 6-year loan at 3.5% interest. (same as in problem 1). a. If the above DaVinci Robotic System, which costs $2.5 million, comes with a service charge for an additional amount of $15,000 each year for 6 years. What is the present value of cash outflow for the MRI machine (use 6% as the discount rate)? b. The salvage value of the machine is $75,000 ten years from now. What is the present value of the salvage value of the DaVinci Robotic System (use 6% as the discount rate)
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