20 Minute Drive Time from 850 Boylston Sg2 projects a 34% growth in use of -mile Radius around 850 Boylston Winch MRI in the next 5 years. in Bond Arlington 3 Rese 850 Boylston St abeervoir I Upper Mystic Lake In 2009, with no in-migration, we can uton s Pines 225 Lower Mystic Lake Malden 60 expect to have an undersupply of Lincoln 2 Concord Ay Medford Arlington Boston and Ave Trepelo Rio Broadway Revere 4.5 MRIs in the defined 20-minute serval 15 ViBy TO Everett 16 117 Belmont Mill St 38 market. Lexington St Somervill Chels If we account for a 10% in-migration, Waltham Belmonts. Fresh Pond 289 145 approximately 7 MRIs would be nd [20 Watertown 135 Cambridge 93 Internati needed to meet the needs of the 20 Weston South su Moody St Charles Iston population. The analysis does not account for Wellesley Ash St SHOT MEN West Newton 90 Storrow Di Newton Chandler Pok 1 30 Makeacon Su Broogine Mass Grove St possible new MRI installations within Gen Rd. Beacon St Beacon Chestnut Hill Boston hituale 16 Newton Highlands Hammond Pond Jamaica udley the market in the next 5 years. Pond Washington & There are currently 16 MRI 850 Boylston (20 minute Drive Time) Heston Rd machines within a 5 mile radius of con 51 webster S corey tick Pond Rd Central Ave 850 Boylston 2032 Dorchester Ave Union S 135 Needham Baker SP Quincy B 2004 2009 hates River at South St VFW Pky Choi St Nepois DAY LOOMON Estimated Annual MRI Cases 75,408 101,085 IS UP MASSAC HUSETTS Milton Aday Estimated Annual Case Capacity per MRI 4,000 Milton earths st Dedham Tryme Center Total MRIs in Market 23 Quincy SL Dover Brush Had Total MRIs in Market within 5-mile radius 16 East St 109 Canton Ave Total MRIs in Market within 5-mile radius not owned by PHS 12 RD' Total MRIs in Market (adjusted for Outpatient Activity) (1) 20.8 Gay S 2Chick atawho Westwood East Braintree MRIs Required in 2009 for Outpatient Care 25.3 Hartford is uques Miside S West St inion MRIs Required in 2009 @ 10% In-migration for Outpatient Care 27.8 37 3 Under/ Oversupply in Market for Outpatient Care (4.5) Oak Pond St Under/ Oversupply in Market @ 10% In-migration for Outpatient Care Norwood Airport Memorial (7.0) Grove S. -Medfield 138 waoh St 24 Hospital-based MRIs are used by outpatients 80% of the time. To capture only the outpatient component, the total number of hospital-based MRIs was multiplied by 0.8.What is this project's NPV? Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Volume 0 2,481 3,308 3,308 3,308 3,308 3,308 3,308 3,308 3,308 Net Revenue Per Case $1,348 $1,339 $1,430 $1,473 $1,513 $1,563 $1,610 $1,658 $1,703 $1,759 Total Cost. Per Case $577 $605 $636 $667 $701 $736 $773 $811 $852 $894 Net. Revenue $0 $3,445,605 $4,731,964 $4,873,923 $5,020,141 $5,170,745 $5,325,868 $5,485,644 $5,650,213 $5,819,719 Total Cost $0 $1,502,031 $2,102,844 $2,207,936 $2,313,385 $2,434,305 $2,556,020 $2,683,821 $2,813,012 $2,953,912 Net Margin $0 $1,943,574 $2,629,121 $2,665,937 $2,701,756 $2,736,441 $2,769,843 $2,301,823 $2,832,201 $2,860,307 Capital Cost $4,325,000 Calculate (note please round calculations to nearest 1000: NPV IRR Payback AAR (assume project cost fully depreciates by end of yr 8; no taxes as it is an NFP) PI Make sure to address these questions: What do you need to know to determine if this is a good project for the hospital or not? How do you address depreciation if you are looking at an analysis? Solve the following Using Excel & demonstrate all excel formulas used Volume Methodology . There are currently 6 Orthopedic and Sports Medicine physicians using an extremities MRI at 850. When these 6 physicians are in need of a full-body MRI they refer to the main campus, however, they are finding that patients are less likely to go downtown, and leakage is occurring. . It is estimated that these 6 physicians order 2 MRI's per day, at 5 days a week for 48 weeks, creating a demand of approximately 2,880 MRIs per year. . In addition to the Orthopedic and Sport Medicine practices, also located at 850 are the Women's Health physicians. These physicians are increasingly ordering more MRI for breast imaging in place of the plain film. And this would add approximately 430 additional cases. . Grand total estimated volume for the MRI at 850 Boylston would be 3,308 at capacity. MRI NPV Calculation & Assumptions . 9% Discount Rate . Total Capital Request: $4.325M . $1.825M: Construction . $2.50M: 1.5 TESLA MRI . Grew total cost per case by 5% . Grew revenue per case by 3% . Held volume steady at 3,308 per year . Cost and Revenue per case based on MRI Department FY05 Actuals - Source TSI