The manager of the surgery department at a hospital

Assignment Help Microeconomics

Reference no: EM13741872

The manager of the surgery department at a hospital which serves mostly Medicare patients. The hospital performs 1,000 surgical operations per year using the traditional method. The Medicare payment for a surgical operation using the traditional method is 2,250 dollars and the cost to the hospital per operation is 1,750 dollars.

a) Compute the total revenue, the total cost, and the profit at the end of each year if the hospital continues to use the traditional method for surgical operations.

b) You have the option to purchase a Robotic Surgery Machine to perform the surgical operations. The machine has a cost of 1,500,000 dollars, but the Medicare payment for a surgical operation using the Robotic Surgery Machine is 2,500 dollars and a surgical operation using a Robotic Surgery Machine has a lower cost per operation of 1,250 dollars.

i) Compute the total revenue, the total cost, and the profit at the end of each year if the hospital performs the surgical operations with the Robotic Surgery Machine.

ii) For simplicity, assume the life of the machine is three years. In addition, assume the opportunity cost of funds (interest rate) is 10% per year. Should the hospital buy the machine?

Reference no: EM13741872

Questions Cloud

Compute the number of units exchanged and the price : Consider a market characterized by the following inverse demand and supply functions: PX = 30 - 3QX and PX = 10 + 2QX. Compute the number of units exchanged and the price at which those units will be exchanged when there is a $24 per unit price floor..

Assignment on aggregate planning assignment : Aggregate Planning Assignment. In general, under what conditions might a firm favor a level production plan over a chase plan? A chase production plan over a level plan?. Why is it important to update a sales and operations plan on a regular basis..

The manager of a business in a competitive market : You are the manager of a business in a competitive market and your production technology is described by the total cost function (q) = 150 + 5q +(1/10)q2 In addition, assume the market price is p = 15 dollars.

Mn equation-sales increase : Broussard Skateboard's sales are expected to increase by 15% from S8 million in 2013 to S9.2 million in 2014. Its assets totaled $5 million at the end of 2013. Broussard is already at full capacity, so its assets must grow at the same rate as proj..

The manager of the surgery department at a hospital : The manager of the surgery department at a hospital which serves mostly Medicare patients. The hospital performs 1,000 surgical operations per year using the traditional method. The Medicare payment for a surgical operation using the traditional meth..

Ebola virus disease : Write one paragraph summery and one paragraph about your reaction about each of these articals: Inflammation plays causal role in neurologic changes associated with Lyme disease and Ebola virus disease

Software developments is for developers to analyze : The goal of real world software developments is for developers to analyze, design, program, and test complete applications that solve the needs of the customer. The iLab exercises you have been given will give you practice with the specific programmi..

How the mouthwashes might kill bacteria : Speculate how the mouthwashes might kill bacteria

What is slurping turtles short run total cost function : Suppose production function for noodle soup at Slurping Turtle is Q =4k^1/2 L^1/2. They currently own 4 units of capital and are not able to change this during the short run. The rental rate of capital is $10 and the wage rate is $20. What is Slurpin..

User Account

All Pages