Net present value (financial)

hello, this is my first time post a question on discussion. can anyone help me solve this. i stuck at it because of salvage value. can anyone guide on how to solve this question.

king hospital is planning to invest 32 layer new CT scan. the cost of the CT scan is 5,000,000$. The new machine has an economic life of five years and depreciated to a 750,000$ of salvage value. The new CT scan is forecast to yield 1,500,000$ per year. The profit is expected to increase at 10% every year. The operating expenses are fixed at 500,000$.

determined the Net Present Value at 8% cost of capital.

#QuantitativeFinance

Easy Math Editor

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Comments

NPV is associated with cash flows, maybe we can assume that the machine is going to be be sold after its economic life at price of 750,000$, regard it as cash flow and discount it.

Arman Isajanyan - 3 years, 5 months ago

Math	Appears as
Remember to wrap math in `\(` ... `\)` or `\[` ... `\]` to ensure proper formatting.
`2 \times 3`	$2 \times 3$
`2^{34}`	$2^{34}$
`a_{i-1}`	$a_{i-1}$
`\frac{2}{3}`	$\frac{2}{3}$
`\sqrt{2}`	$\sqrt{2}$
`\sum_{i=1}^3`	$\sum_{i=1}^3$
`\sin \theta`	$\sin \theta$
`\boxed{123}`	$\boxed{123}$