ABC Medical has invested RM2 million in a Health Diagnostic Support system. To maintain the system, the hospital has to pay the vendor RM10,000 monthly for monitoring and support activities. The system is projected to increase the hospital revenue by RM50,000 monthly. If the system is to be utilized by the hospital for 10 years, calculate the rate of return of the investment using ROI.
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ABC Medical has invested RM2 million in a Health Diagnostic Support system. To maintain the system, the hospital has to pay the vendor RM10,000 monthly for monitoring and support activities. The system is projected to increase the hospital revenue by RM50,000 monthly. If the system is to be utilized by the hospital for 10 years, calculate the rate of return of the investment using
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- The hospital is considering the purchase of imaging equipment worth $25,000 to improve its visual capture results, and improve outcomes. The operating costs will be reduced by $7,000 per year. The computer has an estimated life expectancy of 5 years, and an estimated salvage value of $5,000. What is the profitability index if the discount rate is 8%. Ignore reimbursement considerations.A surgery center specializes in high-risk cardiovascular surgery. The center needs to forecast its profitability over the next three years to plan for capital growth projects. For the first year, the hospital anticipates serving 1,300 patients, which is expected to grow by 9% per year. Based on current reimbursement formulas, each patient provides an average billing of $125,000, which will grow by 2% each year. However, because of managed care, the center collects only 25% of billings. Variable costs for supplies and drugs are calculated to be 10% of billings. Fixed costs for salaries, utilities, and so on will amount to $20,000,000 in the first year and are assumed to increase by 5% per year. Develop a spreadsheet model to predict the net present value of profit over the next three years. Use a discount rate of 4%. (Type whole numbers.) A 1 23456 7 Growth Rates Year 1 B Collection % Variable Cost% Discount Rate % Patients Served C % % % % Average Billing $ D Collected Amount E…A surgery center specializes in high-risk cardiovascular surgery. The center needs to forecast its profitability over the next three years to plan for capital growth projects. For the first year, the hospital anticipates serving 1,300 patients, which is expected to grow by 8% per year. Based on current reimbursement formulas, each patient provides an average billing of $125,000, which will grow by 2% each year. However, because of managed care, the center collects only 25% of billings. Variable costs for supplies and drugs are calculated to be 10% of billings. Fixed costs for salaries, utilities, and so on will amount to $20,000,000 in the first year and are assumed to increase by 6% per year. Develop a spreadsheet model to predict the net present value of profit over the next three years. Use a discount rate of 4%. Complete the accompanving spreadsheet mode for the costs in Year 1 (Type whole numbers. D G H Collection % % Variable Cost % % Discount Rate Growth Rates Total Collected…
- A surgery center specializes in high-risk cardiovascular surgery. The center needs to forecast its profitability over the next three years to plan for capital growth projects. For the first year, the hospital anticipates serving 1,400 patients, which is expected to grow by 9% per year. Based on current reimbursement formulas, each patient provides an average billing of $120,000, which will grow by 3% each year. However, because of managed care, the center collects only 25% of billings. Variable costs for supplies and drugs are calculated to be 10% of billings. Fixed costs for salaries, utilities, and so on will amount to $20,000,000 in the first year and are assumed to increase by 6% per year. Develop a spreadsheet model to predict the net present value of profit over the next three years. Use a discount rate of 4%. (Type whole numbers.) B C D E H 1 Collection % 25 % Variable Cost % 10 % 3 Discount Rate 4% 4 9% Patients Served Average Billing Growth Rates 3% 4% Collected Variable Total…A hospital just purchased upgraded software for the Electronic Medical Record surgical dashboard. The additional surgical dashboard application costs $4,000 now, and will require additional annual payments in years 2 through 8, with new monitors that will cost $10,000 in year 3 and Use an interest rate of 12%, compounded annually. What is the present worth in year 0 of the payments and costs if the interest rate is 12% per year?Since the beginning of the fiscal year 2009, Texas Department of Transportation invest one million each year to build up the transportation management database system in one of the Southern Texas city regions. TxDot is planning to transfer this database system to the city authority by the end of the fiscal year 2020. If the rate of return is 12% per year during the investment period, what is the total value of this database system when transferring?
- The company you work for is evaluating projects to upgrade their information management systems. Two projects under consideration are an upgrade of the account management system with an IRR of 8% and an upgrade of the resource management system with an IRR of 5%. If the discount rate is actually 6%, which project should the company undertake?A supermarket is planning on piloting a self- checkout system in one of its stores. It estimates that this requires an investment of about $500,000 to modify existing checkout lanes into self-checkout lanes. It also estimates that it will save $200,000 yearly in employee salaries by automating the checkout process. If the supermarket's MARR is at 10% per year compounded annually, determine the payback period (in years) for this pilot.A supermarket is planning on piloting a self-checkout system in one of its stores. It estimates that this requires an investment of about $50,000 to modify existing checkout lanes into self-checkout lanes. It also estimates that it will save $200,000 yearly in employee salaries by automating the checkout process. If the supermarket's MARR is at 10% per year compounded annually, determine the Conventional- payback period (in years) for this pilot.
- An engineering firm estimates that its cost for employer sponsored health insurance will be $750,000 next year and increase at 11% per year for the next 5 years. The company CFO wants to budget a uniform amount each year to cover these costs. If the firm's rate of return is 6% per year, how much should be invested each year for employer sponsored health care? Express your answer in $ to the nearest $1,000.A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment of $412,000, and the store expects a return of $100,000 in year one, $72000 in years two and three, $65,000 in years four and five, and $38,000 in year six and beyond, what is the payback period?Keating Hospital is considering two different low-field MRI systems: the Clearlook System and the Goodview System. The projected annual revenues, annual costs, capital outlays, and project life for each system (in after-tax cash flows) are as follows: Assume that the cost of capital for the company is 8 percent. Required: 1. Calculate the NPV for the Clearlook System. 2. Calculate the NPV for the Goodview System. Which MRI system would be chosen? 3. What if Keating Hospital wants to know why IRR is not being used for the investment analysis? Calculate the IRR for each project and explain why it is not suitable for choosing among mutually exclusive investments.