Johnston Implants is planning new online patient diagnostics for surgeons while they operate. The new system will cost $200,000 to install in an operating room, $5000 annually for maintenance, and have an expected life of 5 years. The revenue per system is estimated to be $40,000 in year 1 and to increase by $10,000 per year through year 5. Determine if the project is economically justified using PW analysis and an MARR of 10% per year.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Johnston Implants is planning new online patient
diagnostics for surgeons while they operate. The
new system will cost $200,000 to install in an
operating room, $5000 annually for maintenance,
and have an expected life of 5 years. The revenue
per system is estimated to be $40,000 in year 1 and
to increase by $10,000 per year through year 5.
Determine if the project is economically justified
using PW analysis and an MARR of 10% per year.
Transcribed Image Text:Johnston Implants is planning new online patient diagnostics for surgeons while they operate. The new system will cost $200,000 to install in an operating room, $5000 annually for maintenance, and have an expected life of 5 years. The revenue per system is estimated to be $40,000 in year 1 and to increase by $10,000 per year through year 5. Determine if the project is economically justified using PW analysis and an MARR of 10% per year.
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