Payback period-net present value-annual rate of return

Assignment Help Finance Basics

Reference no: EM1329357

Newman Medical Center is considering purchasing an ultrasound machine for $1,150,000. The machine has a 10-year life and an estimated salvage value of $30,000. Installation costs and freight charges will be $19,200 and $800, respectively. The center uses straight-line depreciation. Newman's cost of capital is 9%.

The medical center estimates that the machine will be used five times a week with the average charge to the patient for ultrasound of $775. There are $5 in medical supplies and $20 of technician costs for each procedure performed using the machine. The present value of an annuity factor for 10 years at 9% is 6.41766, and the present value of a single sum factor for 10 years at 9% is .42241

Instructions

1. For the new ultrasound machine, compute the:

(a) cash payback period.
(b) net present value.
(c) annual rate of return.

Reference no: EM1329357

Questions Cloud

Write the bubble sort : The village of Marengo conducted a census and collected records that include household data, including the number of occupants in each household.

Power to place lien : Paul and John Reardon purchased 16 acres of land located next to a manufacturing plant in Massachusetts. In 1983, a state environmental agency.

Elements of global supply chain management : Evaluate major means of control and explain the elements of global supply chain management.

Leadership powers are best in the initial stage : What leadership powers are best for Peter in the initial stage?

Payback period-net present value-annual rate of return : Newman Medical Center is considering purchasing an ultrasound machine for $1,150,000. The machine has a 10-year life and an estimated salvage value of $30,000.

Explain iso 9000 and its role in supply chains : Explain ISO 9000 and its role in supply chains. Search the Internet for an example of a company that is ISO 9000 certified and search its website for any reference to why it became certified and/or what that means to its customers. Share your find..

Assume that the fed is needs to keep the inflation rate : Assume that the Fed is needs to keep the inflation rate so provide an anchor for inflation expectations.

Time value of money-unearned revenue : What are examples of long-term notes payable in our personal finances? Why is unearned revenue considered a liability?

Check the existing supply chain management process : Check the existing supply chain management process in Starbucks and Describe the flow materials , the organizations functions and the customers it serves.

User Account

All Pages