Mid-State Medical Center wishes to upgrade their in-house MRI to a 3 Tesla magnet, which gives...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mid-State Medical Center wishes to upgrade their in-house MRI to a 3 Tesla magnet, which gives sharper pictures and should reduce the time it takes to complete a procedure. You have gathered the following details on the potential investment: The cost to buy and install the new scanner is $1.3 million. The scanner is expected to last seven years and it should have a salvage value of $175,000 at the end of its useful life. The medical center expects to provide 12 scans per day throughout the life of the scanner. Net revenue per scan in year one is expected to be $450 per scan and is expected to increase 4% per year. Salaries per scan are expected to be $130 per scan and benefits will be 30% of salaries. Salaries are projected to increase 3% per year. Benefits as a percent of salaries will remain at 30% for each year. Supplies per scan will total $100 per scan in year 1 and increase 3% per year. Maintenance will be a fixed $120,000 per year in the first year and increase 3.5% per year. The MRI department will have $84,000 per year in overhead expenses for housekeeping, room maintenance, laundry, and utilities. Those costs will increase by 3% per year. Calculate the cash flows associated with this proposed project. Mid-State Medical Center wishes to upgrade their in-house MRI to a 3 Tesla magnet, which gives sharper pictures and should reduce the time it takes to complete a procedure. You have gathered the following details on the potential investment: The cost to buy and install the new scanner is $1.3 million. The scanner is expected to last seven years and it should have a salvage value of $175,000 at the end of its useful life. The medical center expects to provide 12 scans per day throughout the life of the scanner. Net revenue per scan in year one is expected to be $450 per scan and is expected to increase 4% per year. Salaries per scan are expected to be $130 per scan and benefits will be 30% of salaries. Salaries are projected to increase 3% per year. Benefits as a percent of salaries will remain at 30% for each year. Supplies per scan will total $100 per scan in year 1 and increase 3% per year. Maintenance will be a fixed $120,000 per year in the first year and increase 3.5% per year. The MRI department will have $84,000 per year in overhead expenses for housekeeping, room maintenance, laundry, and utilities. Those costs will increase by 3% per year. Calculate the cash flows associated with this proposed project.
Expert Answer:
Answer rating: 100% (QA)
ANSWER To calculate the cash flows associated with the proposed project we ... View the full answer
Related Book For
Essentials Of Federal Taxation 2019
ISBN: 9781260190045
10th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Posted Date:
Students also viewed these accounting questions
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Q1. How worried are clients and stakeholders in day-to- day product improvement? 2. the industrial corporation Case for Agility "The struggle is not always to the most powerful, nor the race to the...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Host A has a file of 49.5Kbytes to send to host C and host B has a file of 70.5Kbytes to send to host D, both using TCP. TCP connection 1 from A to C and TCP connection 2 from B to D share one...
-
The half-life of a particular radioactive isotope is 6.5 h. If there are initially 48 x 1019 atoms of this isotope, how many remain at the end of 26 h?
-
Why, all else equal, would you expect a wealthier entrepreneur to value a new venture opportunity more highly than an entrepreneur who is less wealthy?
-
Journalize the following transactions for Antique Furniture, Inc., that occurred during the month of January. Jan 3 Purchased $5,700 of merchandise on account, terms 1/10, n/30, FOB shipping point....
-
On December 31, 2018, Mainland Corporation issues 6%, 10-year convertible bonds payable with a face value of $4,000,000. The semiannual interest dates are June 30 and December 31. The market interest...
-
Student Name: Trader Joe's In your response, use the information provided in the "Trader Joe's" case. What activities does Trader Joe's conduct related to operations? What activities does Trader...
-
Large central power stations (about 1000 MW electrical) using fluidized bed combustors may be built some day These giants would be fed 240 tons of coallhr (90% C, 10 % H2,), 50% of which would burn...
-
Prepare a case study that requires critical thinking. The case study should include related questions and guiding answers. AMC Corporation has entered into employment contract with a new CEO which...
-
XYZ Company has provided the following information for the preparation of one part of the budget of the year ended December 31, 2020. a) The Company will sell the under mentioned quantities in each...
-
The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Current...
-
Address the actions taken by the Federal Reserve to mitigate the crisis. Governments and central banks, including the Federal Reserve, contributed then-unprecedented trillions of dollars in bailouts...
-
We have said that todays professional sales representative is a marketing consultant and a manager of a market- his or her territory. Explain how a sales rep. can be a marketing consultant and...
-
Contracts play an important part of all leasing, whether it be residential or commercial. It is important that the verbiage used on a contract be carefully examined in order to determine the rights...
-
A six-year, $2,500 14% bond with annual coupons is purchased to earn a 6% annual return.The price is $3432.26.Find its clean and dirty values at the end of each quarter of the fourth year after its...
-
Catherine (aged 42) and Johnson (aged 45) have been married for 12 years. Johnson is a project manager of an event company at a monthly salary of $55,000 with an additional one-month salary of...
-
Doug is considering investing in one of two partnerships that will build, own, and operate a hotel. One is located in Canada and one is located in Arizona. Assuming both investments will generate the...
-
Juanita paid $50,000 of interest on a mortgage on her home (loan of $1,000,000 at 5% interest rate to buy the residence in 2018; $1,200,000 original purchase price and value at purchase) and $6,500...
-
Woolard Supplies (a sole proprietorship) has taxable income in 2018 of $240,000 before any depreciation deductions (§179, bonus, or MACRS) and placed some office furniture into service during...
-
Calculate the volume occupied by isopropanol vapour at \(200^{\circ} \mathrm{C}\) and 10 bar by using (a) Ideal gas equation of state (b) Virial equation of state (c) Virial equation of state \[...
-
The Dieterici equation of state is given by \[ P(V-b) \exp \left(\frac{a}{R T V} ight)=R T \] where \(a\) and \(b\) are constants. Develop the relations to determine the constants \(a\) and \(b\) in...
-
At \(17^{\circ} \mathrm{C}\), at constant pressure, the heat of combustion of amorphous carbon is 96960 cal and that of \(\mathrm{CO}\) to \(\mathrm{CO}_{2}\) is \(67960 \mathrm{cal}\). Determine the...
Study smarter with the SolutionInn App