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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.
| 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 | ||||
| Fixed Costs | ||||
| Variable Costs | ||||
| Depreciation | ||||
| BT operating income | ||||
| Taxes | ||||
| AT operating income | ||||
| Depreciation | ||||
| Net op. CF | ||||
Assume inflation is 2% |
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
