As part of the overall discussion concerning the da Vinci surgical system, management is contemplating the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
As part of the overall discussion concerning the da Vinci surgical system, management is contemplating the new technological advances in the system as well as the fact that the existing lease is ending. Given the situation, management is evaluating the current number of procedures, an expansion of the robotic surgical system with addition of an additional surgeon, and the lease for a new system. Table 5 New Robot Cost $ 2,500,000.00 Cost of Financing 5.25% Lease Term (Years) 4 Average Cases Per Month 20 Average Revenue per case $ 6,500.00 9. Determine the monthly payment for the new lease for the da Vinci robot. 10. Assuming that other existing variable and fixed costs carryover for the next 4 years (Table 3 except for new lease amount) and that this is an operating lease, what is the NPV of da Vinci robot investment assuming a 12% discount rate. The value of the da Vinci at the end of the lease will be $500,000. 11. What is the new break-even point? 12. Is this a profitable venture for the hospital? If profitable, is it profitable enough? Why or why not? If it is not profitable, should the da Vinci robot be discontinued? Why or why not? This should be a qualitative analysis as well as quantitative. As part of the overall discussion concerning the da Vinci surgical system, management is contemplating the new technological advances in the system as well as the fact that the existing lease is ending. Given the situation, management is evaluating the current number of procedures, an expansion of the robotic surgical system with addition of an additional surgeon, and the lease for a new system. Table 5 New Robot Cost $ 2,500,000.00 Cost of Financing 5.25% Lease Term (Years) 4 Average Cases Per Month 20 Average Revenue per case $ 6,500.00 9. Determine the monthly payment for the new lease for the da Vinci robot. 10. Assuming that other existing variable and fixed costs carryover for the next 4 years (Table 3 except for new lease amount) and that this is an operating lease, what is the NPV of da Vinci robot investment assuming a 12% discount rate. The value of the da Vinci at the end of the lease will be $500,000. 11. What is the new break-even point? 12. Is this a profitable venture for the hospital? If profitable, is it profitable enough? Why or why not? If it is not profitable, should the da Vinci robot be discontinued? Why or why not? This should be a qualitative analysis as well as quantitative.
Expert Answer:
Answer rating: 100% (QA)
9 The monthly payment for the new lease for the da Vinci robot would be 62500 10 The NPV of da Vinci ... View the full answer
Related Book For
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
Posted Date:
Students also viewed these accounting questions
-
As part of a January promotion, flint life fitness ltd. sold six-month membership to its gym for $300. This also included a personal fitness assessment and training plan. Active Life normally charges...
-
As part of their vaccine distribution, Pharma Inc. needs to determine where to warehouse the vaccines to distribute to the Midwest market. Each of the Midwest states can warehouse the vaccines, but...
-
What effect do share repurchases (undertaken as part of the firms dividend decision) have on the value of the firm?
-
In a plant producing multiple products, would absorption costing overcost or undercost the more complex products? Why?
-
Write a balanced chemical equation for the neutralization reaction between each given acid and base. Include the proper phase labels. a. HI(aq) + KOH(aq) ( ? b. H2SO4(aq) + Ba(OH)2(aq) ( ?
-
Myrtle had been sick for quite some time and she passed away in July. Her will indicated her beneficiaries are to receive the following: Miriam, her daughter, will receive Myrtles home worth...
-
As shown in the ASPEN PLUS simulation flowsheet in Fig. 21.15, liquid toluene is to be heated from 100 to \(350^{\circ} \mathrm{F}\) while liquid styrene is to be cooled from 300 to \(100^{\circ}...
-
Frank's Fixtures has two divisions: the Plumbing Division and the Electrical Division. Following are their operating data for the year: Required: 1. Calculate the ROI for each division (use total...
-
Two 1.5-cm-diameter disks face each other, 2.5 mm apart. They are charged to 19 nC. A proton is shot from the negative disk toward the positive disk. What launch speed must the proton have to just...
-
"Code By Day" (CBD) Software Consulting Company: Billing & Payroll System Functional Description: (highlighted words may or may not be objects) The CBD software consulting Company has the following...
-
Truly, Honest and Integrity have capital balance of P1M, P3M and P6M, and profit or loss ratio of 5:1:4, respectively. If the capital balance of Honest after Truly's retirement becomes P3,120,000 and...
-
If average productivity falls, will marginal cost necessarily rise? How about average cost?
-
The chapter points out that businesses give enormous weight to experience, or learning by doing. Empirical evidence suggests that, in surveys and applications, women tend to report the nature of...
-
One farmer can grow 1,000 bushels of corn on 1 acre of land with 200 hours of labor and 20 pounds of seed. Another farmer can grow 1,000 bushels of corn on 1 acre of land with 100 hours of labor and...
-
Under what circumstances could voluntary intoxication serve as a defense? If none, should it result in conviction of a lesser crime? Why or why not?
-
What inputs do you use in studying this book? What would the long-run average total cost and marginal cost curves for studying look like? Why?
-
For the Imitative to improve police training for interaction with people that suffer a mental illness does this chart look ok and can you help me answer the following questions: Line Item Amount ($)...
-
During 2012, Cheng Book Store paid $483,000 for land and built a store in Georgetown. Prior to construction, the city of Georgetown charged Cheng $1,300 for a building permit, which Cheng paid. Cheng...
-
Are sales taxes deductible? Explain.
-
Alice and Frank have the following items on their current-year tax return: Determine the amount of the adjustments that Alice and Frank will have to make in computing their alternative minimumtax....
-
On January 5, 2011, Henry purchases 500 shares of Wichmann, Inc., common stock at a cost of $24,700. On April 1, 2011, he purchases an additional 300 shares for $19,500. On November 13, 2011,...
-
If the displacement of an object is 300 m north, what can you say about the distance traveled by the object?
-
An object traveling at a constant velocity vo experiences a constant acceleration in the same direction for a period of time t. Then an acceleration of equal magnitude is experienced in the opposite...
-
You are told that a person has walked 750 m. What can you safely say about the persons final position relative to the starting point?
Study smarter with the SolutionInn App