The radiology department at Mount Hill Hospital is considering investing in new digital X$-$ray equipment. The proposed investment plan includes:

$$ Purchase of new equipment: The cost of the new equipment is $$150,000,$ and its expected life span is $5$ years due to a rapidly changing technological environment. The equipment will be depreciated to zero over the five years, but the hospital system$$s controller estimates the equipment can be sold for $$20,000$ at the end of Year $5.$

$$ Additional staffing needs: The head of radiology anticipates the need to hire an additional X$-$ray technician at a cost of $$80,000$ annually.

$$ Other fixed costs: Incremental fixed costs from various sources are expected to be $$40,000$ annually.

$$ Variable costs: First$-$year variable costs are estimated at $$30$ per X$-$ray, but due to industry factors, variable costs per X$-$ray are expected to rise at $5\%$ per year.

$$ Revenue per X$-$ray: Mount Hill Hospital serves a large uninsured population and thus receives an average of just $$45$ per X$-$ray from patients and their insurers. MHH estimates it can increase revenue collections by $10\%$ in each of the coming years.

$$ Discount rate: Mount Hill$$s discount rate is $10\%.$

$$ Taxes: Mount Hill$$s tax rate is $36\%.*$

$*$ In reality, this hospital system would likely be organized as a non$-$profit and thus not be subject to corporate taxes. I want you to practice with the tax calculation, so suspend disbelief for now. Plus, for$-$profit hospitals very much still exist!

What is the minimum number of X$-$rays Mount Hill needs to provide per year to cover the cost of the new investment? This should be the same number each year.

Problem$-$Solving Strategies:

$$ Prepare $($and submit$)$ annual income statements using Excel to answer this question.

$$ Consider whether you want to make your decision based on net income or cash flow. What$$s the difference between the two?