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1 - Assuming an interest rate of 3% per year (effective), calculate the feasibility of each option.
You can use either Present Worth Analysis or Equivalent Uniform Worth Analysis. In this part, your
calculation should be done without the use of Excel. Show your equations and the results.
2 - Using linear interpolation, calculate the
should be implemented using Excel.
3 - Assuming that the initial equipment can be
Double Decline Balance Depreciation, calculate the depreciation schedule for the equipment.
4- Assume a state income tax of 5%. Calculate the after-tax cashflow for each option assuming
the depreciation used. Use only the depreciation on question 2.
Step by step
Solved in 4 steps
- Pharmed Caplets is an antibiotic product with monthly revenues and Pharmed Caplets is an antibiotic product with monthly revenues and costs of:TR = $900Q – $0.1Q2 ………… TC = $36,000 + $200Q + $0.4Q2MR = ∂TR/∂Q = $900 – $0.2Q ……. MC = ∂TC/∂Q = $200 + $0.8QA. Set up a spreadsheet for output (Q), price (P), total revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC), average cost (AC), total profit (π), and marginal profit (Mπ). Establish a range for Q from 0 to 1,000 in increments of 100 (i.e., 0, 100, 200, …, 1,000).B. Using the spreadsheet to, create a graph with MR, MC, and AC as dependent variables and units of output (Q) as the independent variable. At what price/output combination is total profit maximized? Why? At what price/output combination is average cost minimized? Why?C. Determine these profit-maximizing and average-cost minimizing price/output…With the population aging and patients who dread sitting in a sterile dental office, dentists are finding an opportunity in dental house calls. The Blende Dental Group has taken its service on the road in San Francisco and New York City, performing everything from routine exams and cleanings to root canals. Some patients are wealthy and prefer the personal service, whereas others are elderly homebounds who cannot get out to the dentist’s office. Recreating a dental office in a home requires additional equipment, such as a portable X-ray machine that looks like a ray gun, sterile water tanks, a dental drill, lights, and a laptop. A portable X-ray machine alone costs $8,000. Refer to Appendix 2: Marketing by the Numbers to answer the following questions. What types of fixed costs are associated with this service? Estimate total fixed costs for this additional service, and assuming a contribution margin of 40 percent, determine the amount of sales necessary to break even on this…Problem # 2 The University Eye Institute in upper New-York state is a state-of-the-art ophthalmology center that specializes in a sophisticated laser surgery to correct myopia. Current annual volume is 1000 operations. A major customer of the center is the United Health Insurance system. United currently sends the University Eye Institute 200 patients per year or 20% of the total. United pays $2,500 per operation as does every payor. The United Health Insurance Company is satisfied with the quality and service provided by the University Eye Institute and has proposed that they send the Center an additional 100 patients (operations) per year. United proposes that the fee be reduced to $2,000 for the additional 100 patients and for the prior 200 patients. Assume the fee paid by payors other than United Health remains the same. a) What is the marginal revenue per patient if the proposal is accepted? b) What is the marginal cost per patient if the proposal is accepted? Here are some cost…
- 3. You have developed a self-study certification system for those who need credit hours for recertification by your state’s social welfare office. The system operates at virtually no cost, i.e., there is no marginal cost. A marketing research team has assembled the following sales information. You are researching the options for pricing the courses. Your goal is to achieve maximum revenue to establish funding to maintain and update the system to reflect annual policy changes in licensing requirements. Complete the calculations for Total Revenue by determining how many customers will purchase at each of the segment prices. Online Self Certifications for Social Work License Certification in Online Counseling Certification as a Group Home Counselor Bundle Customers TR Counseling TR Group Home TR Bundle Segment 1 1000 $190 a $70 e $260 4a Segment 2 1000 $150 b $90 f $240 4b…The northern community of Assiniboine Narrows has a population of 12,000. It has one medical clinic with three doctors, each working 40 hours per week. Each doctor sees four patients per hour. The clinic would like to hire one or two more doctors. The mortality rate in the community is 11 per 1,000 population. This rate will fall to 9.5 per thousand if one doctor is added and to 9 per thousand if two doctors are added. Each new doctor will cost the system $250,000 per year. An alternative plan is to bring in two home care nurses. Each home care nurse will see two patients per hour. The addition of the first nurse will reduce the mortality rate by 0.8 per thousand, and the addition of a second nurse will reduce the mortality rate by 0.6 per thousand. Each home care nurse will cost the system $100,000 per year. Use calculations to examine the alternatives available to Assiniboine Narrows. Then, based on your calculations, make a recommendation as to the preferred course of action. Ensure…Manchester United TV Subscription (annual) Value to a non-Manchester United soccer fan Basic Package $30 $40 Deluxe Package Value to Manchester United fans $120 $200 The table above shows how much the a non-Manchester United fan and a Manchester United fan would pay for an annual subscription to Manchester United TV. The marketing team at Manchester United decides to offer two packages: a basic package that includes all games of the main, youth and women's teams (delayed by one day) and a deluxe package that includes the games (delayed by one day), recording of games from past seasons, and exclusive player interviews. Because there are many more non-Manchester United fans, the marketing team decides to offer the basic package for $30 to attract these fans. What is the maximum price they can charge for the deluxe package if they want Manchester United fans to subscribe to the deluxe package rather than also subscribing to the basic package.
- Consider a consumer with a medical bill of $5,000. He has a $4000 deductible and a 20 percent coinsurance rate on all expenses over $4000. His "out-of-pocket" liability for this bill is (assume he still has $4000 deductible to meet): $5000 $5200 $4000 $4200A drug company is deciding how much to invest in Research and Development into finding a cure stomach cancer. The table below shows the company’s demand for financial capital for R&D of this drug, based on its expected rates of return from selling the drug. Every investment has an additional 4% social return: that is, an investment that pays at least a 5% return to the drug company will create at least a 9% return for society as a whole. Estimated Rate of Return_____________________ Value of R&D Projects That Provide at Least This High a Private Rate of Return to the Drug Company (measured in millions of dollars) 10% $220 9% $228 8% $238 7% $250 6% $264 5% $280 4% $298 3% $308 If the opportunity cost of financial capital for the drug company falls from 7% to 5%, the drug company will invest more in R&D if it receives only the private benefits of this investment. Question 4…Legislation concerning the disposal of biological wastes, the development of more sophisticated imaging machines, and longer patient life spans would all be part of the __________ for a public hospital. general environment specific environment sociocultural environment environmental differentiation internal environment
- Suppose Tim is deciding how much to invest in his health, and his Marginal Efficiency of Investment (MEI) curve for health inputs (H = hours spent exercising per week) is given by the following equation: H = 40 – 100(r+δ), where r is discount rate and δ is the rate of health capital depreciation. If Tim’s discount rate is 8% (or 0.08), and his rate of depreciation of health capital is 4% (or 0.04), how many hours per week will he spend exercising? Show your work. Now, suppose Tim gets a large raise at work, such that his hourly wage doubles. Would we expect his optimal level of health investment to change as a result? If so, how and why? Explain your answer using the theoretical framework.HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air, which requires investment spending. The table below shows the level of R&D spending necessary to achieve different rates of return (due to higher ticket revenue). Private Rate of Return Level of R&D Spending 12% $100 10% $200 8% $300 6% $400 4% $500 If the opportunity cost of financial capital for HighFlyer Airlines is 6%, how much should the firm invest in R&D? Assume that the social rate of return for R&D is an additional 2% on top of the private return; that is, an R&D investment that had a 7% private return to HighFlyer Airlines would…The objective of a publicly traded company is to make profit for its owners i.e. shareholders. However, there are millions of AIDS victims in this world. Most of these victims are from destitute countries, like African nations. It would be irrational for us to think that these people could afford this medicine at an existing market price. The world organizations, such as WHO (world health organization), provide with assistance by subsidizing AIDS related medicine. However, this is not enough as many people are dying every day. Many argue that this medicine should be free as it is the only way a victim's life could be prolonged or saved. GlaxcoSmithKline already allows license for generic drug production to countries, like South Africa. Should our government be involved in controlling the price of this drug? Or, should thegovernment force Glaxco to share the key knowledge of this product with its competitors (price becomes competitive)? Explain why or why not?