A large community hospital is considering buying a robot to perform robotic surgeries. The cost of the
Fantastic news! We've Found the answer you've been seeking!
Question:
A large community hospital is considering buying a robot to perform robotic surgeries. The cost of the technology is $20 mil, the set-up costs are $0.5 mil. The management estimates that it will cost them about $5 mil in foregone revenue to train physicians and other staff to operate the unit in the first year of operation. After that, the robot is expected to bring $3 mil per year, which will grow at 7% annually. The cost of capital is 10%. Should the hospital pursue this investment? Why or why not?
Related Book For
Operations Management Creating Value Along the Supply Chain
ISBN: 978-0470525906
7th Edition
Authors: Roberta S. Russell, Bernard W. Taylor
Posted Date: