Table 3 Operating Expenses Salaries and Wages Employee Benefits Supply Expense - da Vinci Supply Expense - Other Lease Expense Maintenance Expense Depreciation Expense Allocated Hospital Expenses $ 9,500.00 $ 3,325.00 $ 20,000.00 $ 5,000.00 $ 62,000.00 $ 14,000.00 $ 1,500.00 $ 10,000.00 $ 125,325.00 The salaries and wages related to da Vinci surgeries are the support personnel which include RN's, Medical Assistant's, etc. during the procedure. Employee benefits are related to the support personnel of the da Vinci procedures. The supply expense - other relates to expenses associated with the surgical procedures done by the da Vinci but are not directly for the da Vinci equipment itself (sponges, linens, etc.). The lease expense in Page 5 of 8 the monthly lease for the da Vinci. Maintenance expense is the support agreement to maintain the da Vinci. Depreciation expenses are for other equipment located within the da Vinci surgery suite. Allocated Hospital Expenses are fixed overhead expenses that are incurred and would be absorbed by other departments if da Vinci surgeries did not occur. For the purposes of the analysis, management has determined the following: Table 4 Average Cases Per Month Average Revenue per case 6,500.00 12 $ As part of the overall discussion concerning the da Vinci surgical system, management is contemplating the new technological advances in the system as well as the fact that the existing lease is ending. Given the situation, management is evaluating the current number of procedures, an expansion of the robotic surgical system with addition of an additional surgeon, and the lease for a new system. Page 6 of 8 Table 5 $ 2,500,000.00 5.25% New Robot Cost Cost of Financing Lease Term (Years) Average Cases Per Month Average Revenue per case 20 6,500.00 $ 11. What is the new break-even point? 12. Is this a profitable venture for the hospital? If profitable, is it profitable enough? Why or why not? If it is not profitable, should the da Vinci robot be discontinued? Why or why not? This should be a qualitative analysis as well as quantitative