New Hope Medical, Inc. is considering the purchase of a digital mammography machine. The machine will cost $250,000. The machine is expected to be technologically obsolete after 6 years and have no salvage value. Even though the life is 6 years the government currently allows a 5 year depreciation allowance on this asset. The machine will be depreciated over 5 years equally (20% per year) The machine is expected to generate testing revenues in the amount of $200,000 per year and additional patient visits targeted to deal with mammography followup in the amount of $80,000 per year. Fixed Expenses for this machine total $160,000 and COGS are $18 per scan. The contribution rate is $132 per exam. Your tax rate is 30%. Cost of Capital is 18%. You wish to make $120,000 after taxes per year on this scanner. How many mammography's are required in order to make $120,000 after taxes? New Hope Medical, Inc. is considering the purchase of a digital mammography machine. The machine will cost $250,000. The machine is expected to be technologically obsolete after 6 years and have no salvage value. Even though the life is 6 years the government currently allows a 5 year depreciation allowance on this asset. The machine will be depreciated over 5 years equally (20% per year) The machine is expected to generate 2,000 mammography's per year and additional patient visits targeted to deal with mammography followup in the amount of $80,000 per year. Fixed Expenses for this machine total $160,000 and COGS are $18 per scan. The cost per exam is $150 per exam. Your tax rate is 30%. Cost of Capital is 20%. You wish to make S120,000 after taxes per year on this scanner. What is the NPV of this investment? You just bought a MRI for $300,000 and are to make monthly payments for 10 years at 6% APR. You paid an additional $1,000 each month to the payment. This extra amount was applied to the principal. How much total money did you save by paying the extra $1,000 per month instead of making payments for the entire 10 years? You are responsible for ordering inventory. You have the following information. middot It costs $18 to hold one glucose monitor in inventory for a year middot It costs $100 to place an order for glucose monitors middot Customers demand 1,800 glucose monitors every year (Sales are distributed evenly throughout the year) Now suppose the following quantity discounts are available. Valley Community Care handles a variety of skin care products. A particular skin care product product costs Valley Community Care S12.00 per unit. The annual holding cost rate is 20 percent per unit and the ordering costs are $100. Using an EOQ model, they determined that an Economic Order Quantity of 806 units should be used. The lead time to receive an order is one week, and the demand is normally distributed with a mean of 150 units per week and a standard deviation of 50 units per week. What is the reorder point if the firm is willing to tolerate a 5-percent chance of a stock out during an order cycle
