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A HCO's investment of $2,000 in a piece of equipment will reduce labor costs by $550 per year for the next 5 years. Twenty-five percent
A HCO's investment of $2,000 in a piece of equipment will reduce labor costs by $550 per year for the next 5 years. Twenty-five percent (25%) of all patients seen by the firm have a third-party payer arrangement that pays for capital costs on a retrospective basis. Twenty-five percent (25%) of all patients also reimburse for actual operating costs. What is the annual cash flow of the investment? Assume a 5-year life and straight-line depreciation.
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