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Please show answers with excel calculations 5 Shrieves Hol pital Ltd. is considering adding anew line to its diagnostic product mix, and the capital 6

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5 Shrieves Hol pital Ltd. is considering adding anew line to its diagnostic product mix, and the capital 6 budgeting analysis is being conducted by Sidney Johnson, a recently graduated MHA. A new bone densi 7 scanner would be set up in unused space in Shrieves main clinic. The machine s invoice price would be 8 approximately $200,000; another $10,000 in shipping charges would be required; and it would cost an 9 additional $30,000 to install the equipment. The machinery has an economic life of four years and Shrieves 0 has obtained a special tax ruling that places the equipment in the MACRS three-year class. The machine 1 is expected to have a salvage value of $25,000 after four years of use. The new line would generate 2 incremental sales of 1,250 scans per year for four years at an incremental cost of$100 per scan in the 3 first year, excluding depreciation. Each scan would generate revenue of $200 in the first year. The price 4 and cost of each scan are expected to increase 3 percent per year due to inflation. Further, to handle 5 the new line, the hospital's net operating working capital would have to increase an amount equal to 12 6 percent of sales revenues The hospital's tax rate is 40 percent, and its corporate cost of capital is 10 17 percent 9 a. Perform a sensitivi analysis to see how NPV is affected changes in the corporate cost of capital, number of scans. and salvage value. Assume that each of these variables can vary from its base case by plus and minus 15 and 30 percent. 2 b. Perform a scenario analysis using the worst-, most likely, and best-case robabilities in the table below

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