2) University Hospital is considering investing in new equipment costing $200,000. The equipment has a...
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Accounting
2) University Hospital is considering investing in new equipment costing $200,000. The equipment has a 4 year life and no salvage value. Cost savings from the equipment are estimated to be $65,000 per year. The hospital uses 12% as its cost of capital.
Should the hospital pursue this investment?
What would the net present value of this investment be if the cost of capital were reduced to 10%?
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