Johnston Implants is planning new online patient diagnostics for surgeons while they operate. The new system will cost $200,000 to install in an operating room, $5000 annually for maintenance, and have an expected life of 5 years. The revenue per system is estimated to be $40,000 in year 1 and to increase by $10,000 per year through year 5. Determine if the project is economically justified using PW analysis and an MARR of 10% per year.

Johnston Implants is planning new online patient diagnostics for surgeons while they operate. The new system will cost $200,000 to install in an operating room, $5000 annually for maintenance, and have an expected life of 5 years. The revenue per system is estimated to be $40,000 in year 1 and to increase by $10,000 per year through year 5. Determine if the project is economically justified using PW analysis and an MARR of 10% per year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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