A hospital is deciding whether to invest in a new medical di…
A hospital is deciding whether to invest in a new medical dispensing cabinet that will cost $175,000. It believes that this cabinet will reduce the amount of labor required to track and administer medications. It estimates the savings will be $27,000 at the end of year one and that the savings will increase by $6,300 per year for each of the 7 years that the machine will be used. What is the present worth of this investment, assuming the company’s MARR is 6%.