Question #1 Assume a firm is considering the purchase of a new imagining machine. The details for the machine are as follows:

cost: $2,500,000;

delivery: $61,000;

sales tax: 2.5%;

maintenance costs for the machine are fixed $70,000 in year 1 and increase at a rate of 7% annually (these costs do not vary with output);

operating labor: 2 staff members are needed ($106,000 per staff member) to operate the machine for every 2,000 scans provided per year;

the machine is expected to be useable for 7 years;

after 7 years, the machine has a scrap value of $16,000;

each scan completed results in $34 in variable costs

Questions:

1)Please calculate the annual depreciation amount for this machine.

2)Please calculate the total fixed costs, semi-fixed costs, total variable costs, and total fixed costs for this firm for every 100 scans from 2,000 to 10,000 scans.

3)Please calculate the average fixed costs, average semi-fixed costs, average total variable costs, and average total costs for every 100 scans from 2,000 to 10,000 scans.

4)Please calculate the total revenue (P x Q) at price points of $106, $160, $205, $270, and $306.

5)Please calculate the total profits at each price point provided in 1.4.

6)Please graph the organizations AFC, ASFC, AVC, and ATC with each price point (for Q=2,000 to Q=10,000) and list a few conclusions from the illustration.

7)Please graph the organizations total profits for each price point and total costs (for Q=2,000 to Q=10,000) and list a few conclusions from the illustration.

Question #2 (Chapter 5) Using the information in question 1 (however, please assume the firm does not have any semifixed costs):

1.please mathematically calculate the following the breakeven volume for the following prices

$160

$205

$270

2.please calculate the breakeven price for the following volumes:

2,005

2,401

5,002

3.Please recalculate the breakeven points in 2.1 and 2.2 with an economic profit of $205,000.

Question #4 (Chapter 14 with material from other Chapters) Using the information in question 1 as well as the following information below please make a project cash flow analysis (7 years of revenue).

the non-profit firm sells 7,200 scans in year one and that volume sold increases by 3% annually;

labor costs increase 7% annually;

the tax rate is 6.1%;

supply cost is the same as the variable costs for the firm;

and that the payer information is as follows:

Payer Reimbursement Annual reimbursement increase% of scans sold% scans no payment

Commercial $180 9% 40% 7%

Medicare$151 3%25% 3%

Medicaid$106-3% 30% 5%

Uninsured $42117%5% 34%

Using the information from the project cash flow analysis and assuming a cost of capital of 9%, please calculate the following and explain your answers in words.

Payback period

NPV

IRR

Please figure out the contribution margin for each price point provided in Question #2.1