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Dr. Whitely Award, plastic surgeon, had for just returned from a conference during which she learned of a surgical the normal procedure around the eyes,
Dr. Whitely Award, plastic surgeon, had for just returned from a conference during which she learned of a surgical the normal procedure around the eyes, reducing the time to perform 50%. Given her student loan pressures, Dr. Avard was anxious to try out the new technique. By decreasing the time spent on eye treatments or procedures, she could increase her total revenues by performing more within a work period. Unfortunately, in order to implement new process. some special equipment costing $74,000 was needed. The equipment had an life four years, with a salvage value of $6,000 Dr. estimated that her case revenues would increase by the following amounts Revenue Year $19, 800 $27,000 $32, 400 $32, 400 She also expected additional case expenses amounting to $3,000 per years, The cost of capital is 12%. Assume there are no income taxes. Should Dr. Avard buy the machine
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