Hospital is evaluating the purchase of new office equipment from…

Hospital is evaluating the purchase of new office equipment from three vendors. Assume MARR=15% and 4 year useful life on all equipment. Select best vendor.

Assume: Analysis period = useful life = 4 yrs

                               Company A       Company B       Company C

First Cost                   $15K                 $25K                   $20K

Annual O&M               1600                  400                     900

Annual Benefit             8K                    13K                    11K

Salvage Value               3K                     6K                     4.5K

 

 – Select best vendor.

 – What is the NPV of company B?

 – If you had $500,000 today in an account earning 10% each year, how much could you withdraw each year for 25 years?

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