Year 1 Dr. Jones is interested in expanding his practice by adding a piece of radiology equipment. The basic cost of the equipment would be $78,000 for the first year. The monthly loan cost for this equipment is $1,564.29 for years. Additionally, Dr Jones must factor in the cost to hire a radiology tech with a predicted $39,600 annual salary ( this includes all taxes and fringe benefits). The office already has a radiology room, so there are no fixed costs associated with this purchase. You help Dr. Jones determine that the office will do 110 study per year with an average reimbursement of $51.63. The variable cost per study is $ 3.24. A; complete the table below.

B; Determine whether this was a good purchase and explaine why or why not?

Year 2

Dr. Jones' office has purchased the above equipment. It is now year #2 and there is a $7,000 annual maintenance fee that needs to be added to the costs of the equipment. The variable cost is now $ 3.37 per study, but Dr. Jones' office is planning on doing 1675 studies because there has been an addition of two new managed contracts, and there has been a reimbursement increase to $53.16.

a; complete the table below and determine if this was a profit or loss this year?

b; looking at the two years together (year 1 and year 2), was this a good purchase? Briefly explain why or why not.

Year 1 Type answer here Type answer here Type answer here Type answer here Type answer here Type answer here Type answer here Type answer here Year 2 Monthly Cost Maintenance Salary Fixed Costs Variable Costs Total Costs Reimbursement Profit or Loss Type answer here Monthly Cost Maintenance Salary Fixed Costs Variable Costs Total Costs Reimbursement Profit or Loss Type answer here Type answer here Type answer here Type answer here Type answer here Type answer here Type answer here