VNH provides full-service diagnostic imaging to their patients. With a growing number of patients seeking care at their free-standing sites, they saw the need to install a wide-bore (70cm) MRI at one of their outpatient facilities. With limited capital for this project, the hospital considered purchasing a refurbished system directly from the manufacturer or utilizing Shared Imaging’s DI Revolution solution over a 60-month period. Suppose the inflation rate over the 60 months is fixed at 1.65%.

Purchasing a Refurbished System Directly from the Manufacturer Cost (60 Month)

Description I Cost

MR System Maintenance (Monthly) $12,500

Yearly Software/Coil Enhancement $50,000

1.5 OEM Factory Refurbed Wide Bore MRI System $1,000,000

Utilizing Shared Imaging’s DI Revolution Solution (60 Month)

Description I Cost

Shared Image Monthly FS Charge $28,000

Why is NPV the primary evaluation method in the case? If VNH signed a leasing agreement with a solution provider, is there any difference if the lease payment is made at the beginning of each term or made at the end of each term?