What Is the Net Present Value of the Investment, Assuming

question 17

Multiple Choice

What is the net present value of the investment, assuming the required rate of return is 12%? Would the hospital want to purchase the new machine?

• A) $(48,670); no
• B) $25,715; no
• C) $48,670; yes
• D) $83,415; yes
• E) $3,670; yes

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Definitions:

Diagnostic Procedures

Medical tests and evaluations performed to identify the presence of a disease or determine its severity in a patient.

Specificity

The ability of a test to correctly identify those without the disease (true negative rate).

Negative Predictive Value

is the proportion of negative test results that are truly negative, indicating how well a test identifies individuals who do not have a disease.

High Sensitivity

The capability of an assessment to accurately detect individuals who have the disease (true positive rate).