Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are the Director of Pharmacy at Memorial Hospital and have just returned from the hospitals strategic planning retreat where you learned that oncology is

You are the Director of Pharmacy at Memorial Hospital and have just returned from the hospitals strategic planning retreat where you learned that oncology is a focused growth area for the coming years. At a recent industry conference you saw a demonstration of a new robotic technology that provides more efficient and accurate preparation of chemotherapy solutions. You believe that implementing this technology will provide the support your pharmacists need as oncology volumes increase. However, you are also aware that capital expenditures are being closely reviewed. You decide to complete a 5 year ROI analysis and present your findings to hospital senior management. The robot itself costs $1,350,000, it will cost $500,000 to re-configure the existing pharmacy space and $135,000 in personnel training. Once the robot is put into service, Memorial Hospital will be required to purchase a 5-year service/maintenance agreement costing a fixed $160,000 per year and one full-time technician will need to be dedicated to support the system. The average annual salary and fringe of a technician is $50,000. It is anticipated the robot will improve existing workflows each year by: eliminating preparation errors, reducing the purchase of outsourced medication by $500,000, reducing the amount of waste by $250,000 and overall will improve lab employee safety and satisfaction. The weighted average cost of capital is 10%. b) What are the project's cash inflows?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Real Estate Investing Market Analysis Valuation Techniques And Risk Management

Authors: Benedetto Manganelli

1st Edition

3319063960,3319063979

More Books

Students also viewed these Finance questions

Question

How could automation make making errors more effi cient?

Answered: 1 week ago

Question

To find the integral of 3x/(x - 1)(x - 2)(x - 3)

Answered: 1 week ago

Question

What are Fatty acids?

Answered: 1 week ago

Question

What are Electrophoresis?

Answered: 1 week ago