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A medical practice is considering upgrading its electronic medical records system by purchasing new software; it estimates this would cost $590,000 to do. If the
A medical practice is considering upgrading its electronic medical records system by purchasing new software; it estimates this would cost $590,000 to do. If the practice purchases the software, it will take a loan for the entire amount; the interest on the loan is 3%, and the loan will be repaid in 3 equal end of year payments. The medical practice estimates that the new medical records system would generate an additional $270,000 of revenue each year. The software would not have any salvage value. The tax rate is 21%. Assuming a planning horizon of 3 years, that the software is depreciated using straight line depreciation, and that the medical practice uses an after-tax MARR of 11%, compute the PW and determine whether the medical practice should upgrade its electronic medical records system. Click here to access the TVM Factor Table calculator. $ Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is +10. Should the medical practice invest in upgrading its electronic medical records system
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