B Capital Budgeting Problem The Avera Medical Group (AMG) Pediatric Specialist Clinic has a pediatric cardiology sub-specialty practice within the clinic. The pediatric cardiology practice must purchase three new ultrasound machines for pediatric echocardiography and fetal echocardiography. Patient demand and volume for services determines the use and NPV of the new ultrasound machines. The budget available for the clinic to purchase three new machines is $400,000. Two companies are the current market leaders in ultrasound machines, GE and Philips, and both sell three versions of pediatric ultrasound machines that meet the standards for the AMG Pediatric Cardiology practice. Avera administration wants to maximize its NPV of the three ultrasound machines. We cannot purchase two of the same machine to ensure diversity of machines in case of software or hardware problems. Machine Cost NPV GE Vivid e9 $105000 $250000 GE Vivid e95 $135000 $290000 GE Vivid e10 $142000 $300000 Philips Epiq 5c $97000 $223000 Philips Epiq 7c $145000 $160000 $160000 $312000 Philips Epiq 9c To ensure meeting the needs of patients and matching current skill sets of ultrasound techs, the following requirements must also be met. If Avera purchases the GE Vivid e9, they must also purchase the GE Vivid e95. Avera can purchase one or the other of the GE Vivid e9 and Philips Epiq 5c machines but not both. The optimal solution is $852,000 After solving, use Solver Table to determine how machines purchased and NPV changes when the budget changes from $350,000-$500,000. Explain the outcome. NOTE: Think about what would make a reasonable interval to use for your SolverTable input.
B Capital Budgeting Problem The Avera Medical Group (AMG) Pediatric Specialist Clinic has a pediatric cardiology sub-specialty practice within the clinic. The pediatric cardiology practice must purchase three new ultrasound machines for pediatric echocardiography and fetal echocardiography. Patient demand and volume for services determines the use and NPV of the new ultrasound machines. The budget available for the clinic to purchase three new machines is $400,000. Two companies are the current market leaders in ultrasound machines, GE and Philips, and both sell three versions of pediatric ultrasound machines that meet the standards for the AMG Pediatric Cardiology practice. Avera administration wants to maximize its NPV of the three ultrasound machines. We cannot purchase two of the same machine to ensure diversity of machines in case of software or hardware problems. Machine Cost NPV GE Vivid e9 $105000 $250000 GE Vivid e95 $135000 $290000 GE Vivid e10 $142000 $300000 Philips Epiq 5c $97000 $223000 Philips Epiq 7c $145000 $160000 $160000 $312000 Philips Epiq 9c To ensure meeting the needs of patients and matching current skill sets of ultrasound techs, the following requirements must also be met. If Avera purchases the GE Vivid e9, they must also purchase the GE Vivid e95. Avera can purchase one or the other of the GE Vivid e9 and Philips Epiq 5c machines but not both. The optimal solution is $852,000 After solving, use Solver Table to determine how machines purchased and NPV changes when the budget changes from $350,000-$500,000. Explain the outcome. NOTE: Think about what would make a reasonable interval to use for your SolverTable input.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:B
Capital Budgeting Problem
The Avera Medical Group (AMG) Pediatric Specialist Clinic has a pediatric cardiology sub-specialty practice within the clinic. The pediatric cardiology practice must purchase three new ultrasound
machines for pediatric echocardiography and fetal echocardiography. Patient demand and volume for services determines the use and NPV of the new ultrasound machines. The budget available for the clinic
to purchase three new machines is $400,000. Two companies are the current market leaders in ultrasound machines, GE and Philips, and both sell three versions of pediatric ultrasound machines that meet the
standards for the AMG Pediatric Cardiology practice. Avera administration wants to maximize its NPV of the three ultrasound machines. We cannot purchase two of the same machine to ensure diversity of
machines in case of software or hardware problems.
Machine
Cost
NPV
GE Vivid e9
$105000
$250000
GE Vivid e95
$135000
$290000
GE Vivid e10
$142000
$300000
Philips Epiq 5c
$97000
$223000
Philips Epiq 7c
$145000
$160000
$160000
$312000
Philips Epiq 9c
To ensure meeting the needs of patients and matching current skill sets of ultrasound techs, the following requirements must also be met. If Avera purchases the GE Vivid e9, they must also purchase the GE
Vivid e95. Avera can purchase one or the other of the GE Vivid e9 and Philips Epiq 5c machines but not both.
The optimal solution is $852,000
After solving, use Solver Table to determine how machines purchased and NPV changes when the budget changes from $350,000-$500,000. Explain the outcome. NOTE: Think about what would make a
reasonable interval to use for your SolverTable input.
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