Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Solve step by step clearly and type otherwise I'll dislike solve carefully $75 $123 $75 $156 $110 $104 $62 $59 31 OH Jashtabula East North
Solve step by step clearly and type otherwise I'll dislike
solve carefully
$75 $123 $75 $156 $110 $104 $62 $59 31 OH Jashtabula East North Cent 32 WI columbia East North Centr 33 OH darke East North Centr 34 MI livingston East North Centr 35 WI Winnebago East North Centr 36 WI rock East North Centr 37 IL winnebago East North Centr 38 IL coles East North Centr 39 IL rock island East North Centr 40 MI st.joseph East North Centro 41 IL sangamon East North Centr 42 OH hamilton East North Centr 43 Mingham East North Centr 44 IL macoupin East North Centr 45 OH tuscarawas East North Centr 46 OH llake East North Centr 47 OH portage East North Centri 48 IL peoria East North Centre 49 MI bay East North Centr MI berrien East North Centr $129,950 $259,950 $109,950 $299,050 $204,950 $183,500 $110,050 $79,950 $127,550 $192,000 $151,664 $227,500 $149,000 $88,050 $139,950 $159,950 $194,950 $133,000 $87,750 $309,050 $97 $101 $83 $100 $94 $58 $85 $96 $102 $74 $67 $144 1,550 2,027 1,525 1,933 1,733 1,783 1,728 1,564 1,384 1,847 1,837 1,447 1,592 1,440 1,509 1,521 1,800 1,799 1,410 2.031 The city of Garden Ridge, Florida, has received designs for a new patient room wing to the municipal hospital from two architectural consultants. One of the two designs must be ac- cepted in order to announce it for construction bids. The costs and benefits are the same in most categories, but the city financial manager decided that the estimates below should be consid- ered to determine which design to recommend at the city council meeting next week and to present to the citizenry in preparation for an upcoming bond referendum next month. Design A Design B Construction cost, 10,000,000 15,000,000 Building maintenance cost, s/year 35,000 55,000 Patient usage copay, $/year 450,000 200,000 The patient usage copay is an estimate of the amount paid by patients over the insurance coverage generally allowed for a hospital room. The discount rate is 5%, and the life of the building is estimated at 30 years (a) Use incremental B/C analysis to select design A or B. (b) Once the two designs were publicized, the privately owned hospital in the directly adjacent city of Forest Glen lodged a complaint that design A will reduce its own municipal hospi- tal's income by an estimated $500,000 per year because some of the day-surgery features of design A duplicate its services. Subsequently, the Garden Ridge merchants association argued that design B could reduce its annual revenue by an estimated $400,000, because it $75 $123 $75 $156 $110 $104 $62 $59 31 OH Jashtabula East North Cent 32 WI columbia East North Centr 33 OH darke East North Centr 34 MI livingston East North Centr 35 WI Winnebago East North Centr 36 WI rock East North Centr 37 IL winnebago East North Centr 38 IL coles East North Centr 39 IL rock island East North Centr 40 MI st.joseph East North Centro 41 IL sangamon East North Centr 42 OH hamilton East North Centr 43 Mingham East North Centr 44 IL macoupin East North Centr 45 OH tuscarawas East North Centr 46 OH llake East North Centr 47 OH portage East North Centri 48 IL peoria East North Centre 49 MI bay East North Centr MI berrien East North Centr $129,950 $259,950 $109,950 $299,050 $204,950 $183,500 $110,050 $79,950 $127,550 $192,000 $151,664 $227,500 $149,000 $88,050 $139,950 $159,950 $194,950 $133,000 $87,750 $309,050 $97 $101 $83 $100 $94 $58 $85 $96 $102 $74 $67 $144 1,550 2,027 1,525 1,933 1,733 1,783 1,728 1,564 1,384 1,847 1,837 1,447 1,592 1,440 1,509 1,521 1,800 1,799 1,410 2.031 The city of Garden Ridge, Florida, has received designs for a new patient room wing to the municipal hospital from two architectural consultants. One of the two designs must be ac- cepted in order to announce it for construction bids. The costs and benefits are the same in most categories, but the city financial manager decided that the estimates below should be consid- ered to determine which design to recommend at the city council meeting next week and to present to the citizenry in preparation for an upcoming bond referendum next month. Design A Design B Construction cost, 10,000,000 15,000,000 Building maintenance cost, s/year 35,000 55,000 Patient usage copay, $/year 450,000 200,000 The patient usage copay is an estimate of the amount paid by patients over the insurance coverage generally allowed for a hospital room. The discount rate is 5%, and the life of the building is estimated at 30 years (a) Use incremental B/C analysis to select design A or B. (b) Once the two designs were publicized, the privately owned hospital in the directly adjacent city of Forest Glen lodged a complaint that design A will reduce its own municipal hospi- tal's income by an estimated $500,000 per year because some of the day-surgery features of design A duplicate its services. Subsequently, the Garden Ridge merchants association argued that design B could reduce its annual revenue by an estimated $400,000, because itStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started