Watauga Medical Center is considering purchasing an ultrasound machine for $1,135,000. The machine has a 10-year life

Question:

Watauga Medical Center is considering purchasing an ultrasound machine for $1,135,000. The machine has a 10-year life and an estimated salvage value of $40,000. Installation costs and freight charges will be $24,200 and $800, respectively. The Center uses straight-line depreciation.
The medical center estimates that the machine will be used five times a week with the average charge to the patient for ultrasound of $850. There are $10 in medical supplies and $40 of technician costs for each procedure performed using the machine.
Instructions
(a) Compute the payback period for the new ultrasound machine.
(b) Compute the annual rate of return for the new machine.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Government and Not for Profit Accounting Concepts and Practices

ISBN: 978-1118983270

7th edition

Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith

Question Posted: