Final answer:
A cost comparison for two MRI scanners over a 7-year period shows that while Company A's scanner has a higher initial cost, Company B's scanner has a higher overall maintenance cost. However, considering the provided revenue, both machines would cover their costs. Additional factors must also be considered in the final decision.
Step-by-step explanation:
The student is comparing the cost of purchasing and maintaining MRI scanners from two different companies over a period of 7 years. To accomplish this, a cost-benefit analysis needs to be conducted, comparing the initial acquisition cost plus the total maintenance cost over the machine's lifespan against the expected revenue generation from using the scanners.
For Company A, the total cost would be the initial $2,000,000 plus 7 years of annual maintenance at $100,000. This equates to $2,000,000 + ($100,000 * 7) = $2,700,000. For Company B, the total cost would be the initial $1,500,000 plus 7 years of annual maintenance at $150,000. This equates to $1,500,000 + ($150,000 * 7) = $2,550,000. Therefore, Company B's MRI scanner is less expensive over the 7-year period.
The revenue generated by either scanner isn't provided for years 3 to 7, but assuming a conservative estimate equal to the lower figure provided for years 1 and 2 ($500,000), the minimum revenue over 7 years would be $500,000 * 7 = $3,500,000 for either scanner. Thus, both scanners would be expected to cover their costs and provide additional revenue.
It's important to factor in additional considerations such as reliability, service quality, and potential downtime, which could affect overall profitability but are not provided in the information. Decision-makers might also consider future advances in scanner technology, like upgrades to two-photon microscopes or the implementation of three-dimensional baggage scanners with face recognition for security, as the technology in the radiology field continues to advance rapidly.