Question
Given the following data, complete the Cash Flow Analysis for Lehman Hospital: Lehman Hospital is considering the purchase of a new MRI machine, which costs
Given the following data, complete the Cash Flow Analysis for Lehman Hospital:
Lehman Hospital is considering the purchase of a new MRI machine, which costs $3,000,000, with no salvage value and an expected life of five years. The MRI machine is expected to have fixed operating costs of $350,000 per year and variable operating costs of $10 per procedure. The equipment is expected to be used 20 times per day for 300 days a year, for each year of the life of the machine. The average billing price for one procedure is $100. All costs and revenues are expected to increase at a 5 percent inflation rate after the first year. The corporate cost of capital is 10%. (30 points) I need to know how everything is calculated...formulas please! Can this be done on excel?
(a) | ||||||
Year | ||||||
0 | 1 | 2 | 3 | 4 | 5 | |
Equipment Cost | ||||||
Net Revenues | ||||||
Fixed Operating Costs | ||||||
Variable Operating Costs | ||||||
Net Operating Income | ||||||
Equipment Salvage Value | ||||||
Net Cash Flow | ||||||
NPV manual calculation. | ||||||
Corporate Cost of Capital | ||||||
NPV | ||||||
IRR | ||||||
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