Essay
Health Care Systems of the South is about to buy an expensive piece of diagnostic equipment. The company estimates that it will generate uniform revenues of $500,000 for each of the next eight years. What is the present value of this stream of earnings, at an interest rate of 6%?
What is the present value if the machine lasts only six years, not eight?
If the equipment cost $2,750,000, should the company purchase it?
Correct Answer:
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S = R * X = 500,000 * 6.210 = $3,105,000...View Answer
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Correct Answer:
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