Doctor E. is considering purchasing a new blood analysis machine to test for leukemia; it will cost $78,000. He estimates that he could charge $32.00 for an office visit to have a patient's blood analyzed, while the actual cost of a blood analysis would be $8.00. What would the profit be for a quantity of 11,900 leukemia blood analyses?

Doctor E. is considering purchasing a new blood analysis machine to test for leukemia; it will cost $78,000. He estimates that he could charge $32.00 for an office visit to have a patient's blood analyzed, while the actual cost of a blood analysis would be $8.00. What would the profit be for a quantity of 11,900 leukemia blood analyses?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 5CE: Keating Hospital is considering two different low-field MRI systems: the Clearlook System and the...

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The hospital is considering the purchase of imaging equipment worth $25,000 to improve its visual capture results, and improve outcomes. The operating costs will be reduced by $7,000 per year. The computer has an estimated life expectancy of 5 years, and an estimated salvage value of $5,000. What is the profitability index if the discount rate is 8%. Ignore reimbursement considerations.
The Atlantic Medical Clinic can purchase a new computer system that will save $6,000 annually in billing costs. The computer system will last for six years and have no salvage value. Required: What is the maximum price (i.e., the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic Medical Clinic should be willing to pay for the new computer system if the clinic's required rate of return is: (Round your final answer to the nearest whole dollar amount.) Maximum Price 1. Nine percent 2. Fourteen percent
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