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In-Class Cash Flow Estimation Exercise Information to Solve Case 1) Assume Bloomington Indiana Mellencamp Health System, a not-for-profit hospital, is evaluating a new MRI. 2)
In-Class Cash Flow Estimation Exercise | ||||||
Information to Solve Case | ||||||
1) Assume Bloomington Indiana Mellencamp Health System, a not-for-profit hospital, is evaluating a new MRI. | ||||||
2) Cost | ||||||
Purchase price | $500,000 | |||||
Shipping and Install | $80,000 | |||||
3) Expected life | 5 years | |||||
4) Salvage Value | $250,000 | |||||
5) Utilization | 6000 scans per year | |||||
6) Net Revenue | $150 per scan | |||||
7) Variable Cost | $75 per scan | |||||
8) Fixed cost | $150,000 | |||||
9) Corporate cost of capital | 12% | |||||
Calculate the operating cash flow | ||||||
Year 1 | Year 2 | Year 3 | Year 4 | |||
Revenue | ||||||
Total Variable Cost | ||||||
Fixed Costs | ||||||
Depreciation | ||||||
BT operating income | ||||||
Taxes | ||||||
AT operating income | ||||||
Depreciation | ||||||
Net op. CF |
Please include formulas.
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