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Question: Spring Valley hospital's board of directors has approved of purchasing of a CT scanner with a capital investment of $300,000. The estimated life of the CT scanner is 10 and during that period the estimated after-tax cash flows (EATCF) are given below. The investments required rate of return is 15%.

Year	0	1	2	3	4	5	6	7	8	9	100
EATCF ($1000)	-$300	$50	$55	$60	$60	$65	$65	$70	$70	$75	$75

Evaluate this investment, in terms of:

a) Average rate of Return

b) Net Present Value

c) Profitability index

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92717568

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