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Burdel Labs is a diagnostic laboratory that does various tests (blood tests, urine tests, etc.) for doctors' offices in the Indianapolis area. Test specimens are
Burdel Labs is a diagnostic laboratory that does various tests (blood tests, urine tests, etc.) for doctors' offices in the Indianapolis area. Test specimens are picked up at the doctors offices and are transported to the testing facility with uniform arrivals throughout the day. Al tests go through two testing enters in the testing facility Test Center A and Tent Center B. A has a current capacity of 1,000 units per week and B is capable of 1,500 units per week. The facility operates 50 weeks per year. This year (year ), test volumes are expected to reach 1,000 units per wees Growth per week is projected at an additional 200 units through year 5(, 1.200 per week in year 11. 1.400 per week in year 2, etc.). Pro-tax profits are expected to be $5 per test throughout the 5-year planning period. Two alternatives are being considered 1) Expand both Test Centers A and at the end of year to a capacity of 2.000 units per week at a total cost for both Test Centers of $300,000 2) Expand Test Center A at the end of year 0 to 1,500 units per week, matching Test Center B, at a cost of 5100,000, then expanding both Test Centers to 2.000 units per year at the end of year 3, at an Burdal Labe will not consider projects that don't show a Sh year positive net present value using a discount rate of 15% What is the pretex cash flow (not present value) for alternative 2.compared to the base care of Going nothing for the next five year? OA More than 500.000 but less than 100.000 O. More than $160.000 OC. Negative pre-tax cash flow OD. More than 50 but loss than 500.000 Burdel Labs is a diagnostic laboratory that does various tests (blood tests, urine tests, etc.) for doctors' offices in the Indianapolis area. Test specimens are picked up at the doctors offices and are transported to the testing facility with uniform arrivals throughout the day. Al tests go through two testing enters in the testing facility Test Center A and Tent Center B. A has a current capacity of 1,000 units per week and B is capable of 1,500 units per week. The facility operates 50 weeks per year. This year (year ), test volumes are expected to reach 1,000 units per wees Growth per week is projected at an additional 200 units through year 5(, 1.200 per week in year 11. 1.400 per week in year 2, etc.). Pro-tax profits are expected to be $5 per test throughout the 5-year planning period. Two alternatives are being considered 1) Expand both Test Centers A and at the end of year to a capacity of 2.000 units per week at a total cost for both Test Centers of $300,000 2) Expand Test Center A at the end of year 0 to 1,500 units per week, matching Test Center B, at a cost of 5100,000, then expanding both Test Centers to 2.000 units per year at the end of year 3, at an Burdal Labe will not consider projects that don't show a Sh year positive net present value using a discount rate of 15% What is the pretex cash flow (not present value) for alternative 2.compared to the base care of Going nothing for the next five year? OA More than 500.000 but less than 100.000 O. More than $160.000 OC. Negative pre-tax cash flow OD. More than 50 but loss than 500.000
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