The radiology department at St. Josephs Hospital, a not-for-profit, is considering purchasing a magnetic resonance...
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The radiology department at St. Josephs Hospital, a not-for-profit, is considering purchasing a magnetic resonance imaging (MRI) machine. The cost to purchase and install an MRI is approximately $2,000,000. Assume St. Josephs would like a minimum 6 percent return and that the economic life of the MRI is expected to be 10 years, with no salvage value. Assume that if the MRI is installed, the net cash flows are expected to increase by $400,000 per year. Use Exhibit 264 for present value factors. Required: c. What nonfinancial considerations might be important to the MRI investment decision
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