Raleigh Medical Clinic is considering acquiring 2 new ultrasound machines for $300,000. The clinic estimates that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Raleigh Medical Clinic is considering acquiring 2 new ultrasound machines for $300,000. The clinic estimates that the machines will have an economic life of 4 years after which they will have zero salvage value. The machines expects the two machines to generate net revenue of $1,000,000 per year and to require $900,000 per year in fixed costs. The CCC of the clinic is 8 percent. Conduct a sensitivity analysis. Step 1 - Assemble the relevant data System cost $0 Revenue $0 $0 Fixed costs CCC 0% Step 2 - Calculate the net cash flows (000s of dollars) 0 1 System cost Net revenue Fixed costs Net income $0 Step 3 - Calculate net present value NPV $0.00 $0 $0 $0 2 $0 $0 $0 3 $0 $0 $0 4 $0 $0 $0 Raleigh Medical Clinic is considering acquiring 2 new ultrasound machines for $300,000. The clinic estimates that the machines will have an economic life of 4 years after which they will have zero salvage value. The machines expects the two machines to generate net revenue of $1,000,000 per year and to require $900,000 per year in fixed costs. The CCC of the clinic is 8 percent. Conduct a sensitivity analysis. Step 1 - Assemble the relevant data System cost $0 Revenue $0 $0 Fixed costs CCC 0% Step 2 - Calculate the net cash flows (000s of dollars) 0 1 System cost Net revenue Fixed costs Net income $0 Step 3 - Calculate net present value NPV $0.00 $0 $0 $0 2 $0 $0 $0 3 $0 $0 $0 4 $0 $0 $0
Expert Answer:
Answer rating: 100% (QA)
Here are the stepbystep workings 1 Assemble the relevant data System cost 300000 Revenu... View the full answer
Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118155974
6th edition
Authors: Michael H. Granof, Saleha B. Khumawala
Posted Date:
Students also viewed these finance questions
-
a. Define "incremental cash flow." 1. Should you subtract interest expense or dividends when calculating project cash flow? 2. Suppose the firm had spent $100,000 last year to rehabilitate the...
-
Shrieves Casting Company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by Sidney Johnson, a recently graduated MBA. The production line...
-
Shrieves Casting Company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by Sidney Johnson, a recently graduated MBA. The production line...
-
Suppose that Q(x, y) is a function such that 1/Q(x, y) is continuous for all (x, y). Which of the following statements are true? (a) Q(x, y) is continuous for all (x, y). (b) Q(x, y) is continuous...
-
Which of the following observations appear to indicate market inefficiency? Explain whether the observation appears to contradict the weak, semi-strong, or strong form of the efficient-market...
-
Company G has a hardware business. The balance sheet at the beginning of the financial year showed the position in Table 2.23. Show the adjustments, in the columns provided, for each of the following...
-
Use the coefficients of the multiple regression equation in Figure 13.5 to predict the lung capacity for a 10-year-old who is 57 inches tall and weighs 90 pounds, at a pressure of 30.2 inches and a...
-
The Sun Theater, owned by Ha Ji-Won, will begin operations in March. The Sun will be unique in that it will show only triple features of sequential theme movies. As of March 1, the ledger of Sun...
-
VEC Inc. currently has 1450000 zero coupon bonds outstanding, each with a face value of $1,000. The bonds have a maturity of 4 years and they are traded in the market at 87% of par. If the tax rate...
-
Ashton and Melody Webb are a married couple in their mid-20s. Ashton has a good start as an electrical engineer and Melody works as a sales representative. Since their marriage four years ago, Ashton...
-
Cameron is so happy with their building endeavours that he give Julie an antique dinning table for their home as a bonus. Carter pays for the table at a cost of $20,000 explain the tax implications...
-
The Low Cost Producer Price When Tom Solnik, Vice President and COO for refrigeration products at Top Brass Inc., arrived at this office, he had three urgent messages to call the V.P. of Operations...
-
1. What is your message to your prospective target? 2. Identify the media in which you would use to reach your audience. (Wi-fi, Netwotking) If you feel multiple sources of media are necessary...
-
Assume an economy in which there are only two persons, (ij). Each individual's utility function is u;= min{x,2x}, uj = min{2x,x}. In addition, each individual has (xi,1, xxi,2)=(xj,1,xj,2) = (15,15)...
-
A customer requires during the next four months 50, 65, 100, and 70 units of a commodity respectively. Production costs are $5, $8, $4, and $7 per unit during these months. Storage cost per unit is...
-
operations. This challenge has 3 parts: (1) What are motivational operations? Your answer is limited to no more than 20 words. (2) How do they relate to abolishing and establishing operations? Your...
-
Describe (briefly!!!) the path a process might take through the five states specified in the five-state model discussed in the text?
-
All of the following assets can be depreciated, except: (a) A bulldozer (b) A copper mine (c) A surgical robot (d) A conveyor belt
-
At the end of the year O'Toole General Hospital, which carries no medical malpractice insurance, had the following list of malpractice claims: 1. Mr. Seymour Green, a heart patient, led a claim for...
-
The following is an excerpt from a note to the nancial statements of the city of Dallas (dates changed): The city prepares its annual appropriated general fund, debt service fund, and proprietary...
-
Henry Green is the assistant to a county's comptroller. During the year he becomes aware of several accounting and budgeting practices that, taken together, clearly establish a pattern that the...
-
An electronic instrument is to be isolated from a panel that vibrates at frequencies ranging from \(25 \mathrm{~Hz}\) to \(35 \mathrm{~Hz}\). It is estimated that at least 80 percent vibration...
-
An exhaust fan, having a small unbalance, weights \(800 \mathrm{~N}\) and operates at a speed of \(600 \mathrm{rpm}\). It is desired to limit the response to a transmissibility of 2.5 as the fan...
-
An air compressor of mass \(500 \mathrm{~kg}\) has an eccentricity of \(50 \mathrm{~kg}-\mathrm{cm}\) and operates at a speed of \(300 \mathrm{rpm}\). The compressor is to be mounted on one of the...
Study smarter with the SolutionInn App