HC 306 - Unit 5 Assignment
You are a practice manager for Eden Wellness and Aesthetics - a successful and high patient volume med-spa. As the practice manager, you are responsible for arranging financing for equipment purchases and determining pricing for new services. You have been asked to purchase a laser machine, with a purchase price of $25,000. You will need to determine the treatment price for patients, and how many treatments must be sold to reach a profitable return on the investment. For this scenario, you will only be factoring in the cost of purchasing the laser machine, not additional costs of supplies, administrative expenses, etc.
Consider this information as you work through the Excel document:
		Opportunity cost of capital is 12% Estimate cash flows (treatment price) for six months Competitor pricing for this procedure is $1,200
Please input in ALL YELLOW CELLS
# of treatments at $_____ each	Net Present Value (NPV)		# of treatments at $_____ each	Internal Rate of Return (IRR)
	12%	Project (opportunity) cost of capital			12%	Project (opportunity) cost of capital
	$ (25,000)	Cash flow month 0			$ (25,000)	Cash flow month 0
Example: 3 at $,1000	$ 3,000	Cash flow month 1		Example: 3 at $,1000	$ 3,000	Cash flow month 1
		Cash flow month 2				Cash flow month 2
		Cash flow month 3				Cash flow month 3
		Cash flow month 4				Cash flow month 4
		Cash flow month 5				Cash flow month 5
		Cash flow month 6				Cash flow month 6
	$ (22,321.43)	NPV <-- a formula is used in this cell so calculations are automatic			-88%	IRR <-- a formula is used in this cell so calculations are automatic
		For this to be a profitible investment, should NPV be positive or negative?				For this to be a profitible investment, should IRR exceed the project cost of capital or not?
		Answer:				Answer:
Briefly explain when profitibility will be achieved (how many months or treatments sold).
Answer: