The modified B/C ratio for a city-owned hospital heliport project is 1.7. The initial cost is $0.55 million, annual benefits are $150,000, and the estimated life is 27 years. What is the amount of the annual M&O costs used in the calculation at a discount rate of 6% per year? The annual M&O costs is $

The modified B/C ratio for a city-owned hospital heliport project is 1.7. The initial cost is $0.55 million, annual benefits are $150,000, and the estimated life is 27 years. What is the amount of the annual M&O costs used in the calculation at a discount rate of 6% per year? The annual M&O costs is $

Name: Veer The modified B/C ratio for a city-owned hospital heliport project
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Description: Veer The modified B/C ratio for a city-owned hospital heliport project is 1.7. The initial cost is $0.55 million, annual benefits are $150,000,and the estimated life is 27 years. What is the amount of the annual M&O costs used in the calculation at a

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 4PA: Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the...

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Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the past year, Jefferson reported an after-tax income of $7 million. Total interest expense was $3,200,000, and the hospital tax rate was 30%. Total assets totaled $70 million, and non-interest-bearing current liabilities were $22,800,000. The required rate of return established by Jefferson is equal to 18% of invested capital. What is the residual income of Jefferson Memorial Hospital?
The modified B/C ratio for a city-owned hospital heliport project is 1.7. The initial cost is $1 million, annual benefits are $150,000, and the estimatedlife is 30 years. What is the amount of the annual M&O costs used in the calculation at a discount rate of 6% per year?
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: Clearlook Goodview Annual revenues $720,000 $900,000 Annual operating costs 445,000 655,000 System investment 900,000 800,000 Project life 5 years 5 years Assume that the cost of capital for the company is 8%. 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…
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: Clearlook Goodview Annual revenues $720,000 $900,000 Annual operating costs 445,000 655,000 System investment 900,000 800,000 Project life 5 years 5 years Assume that the cost of capital for the company is 8 percent. The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems. Required: Calculate the NPV for the Clearlook System.$ Calculate the NPV for the Goodview System.$ Which MRI system would be chosen? Clearlook System Goodview System3. What if Keating Hospital wants to know why IRR is not being used for the investment analysis? Calculate the IRR for each project. Round the discount factor to three decimal places. Round the IRR…
Two locations are considered for a new public small hospital. Location A would require an investrment of $3.4 million and $55,000 per ycar to maintain. Location B would cost $4.8 million to construct. The operating cost of location B will be $43,000 per year. The benefits will be $550,000 per year at location A and 5750000 at location B The disbenefits associated with each location are $35,000 per year for location A and $45,000 per year for location B. Assame the hospital will be maintained indefinitely Use an interest rate of 12% per year to determine which location, if either, should be selected on the basis of the BC method.
The Parks and Recreation Department of Burkett County estimates that the initial cost of a “barebones” permanent river park will be $2.3 million. Annual upkeep costs are estimated at $120,000. Benefits of $340,000 per year and disbenefits of $40,000 per year have also been identified. Using a discount rate of 6% per year, calculate (a) the conventional B/C ratio and (b) the modified B/C ratio.
the hospital must decide whether or not to purchase new respirators. These respirators will help patients of covid – 19, and it will reduce the costs to patients at an estimated value of 100,000 Php. The prices of these 3 respirators are 500,000 Php for the first year, 550,000 Php for the second year, and 600,000 Php for the third year. If the interest rate for the acquisition of these respirators is 12%, determine the net present value for these respirators. Using the formula NPV=FV-OCW
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It is known that a project for the construction of public facilities with estimated costs and benefits of the project is as follows: • 6 year project life. • The applicable discount rate is 10% in the first year and the discount for the first year the second is an increase of 5%. • Expenses incurred only in year 1 and 2, with each Rp. 515,000,000 and Rp. 415 000 000. • Benefits received from year 3 to year 6 respectively Rp. 205,000,000, Rp. 305 000 000, Rp. 405 000 000 and IDR 505,000,000 Please count and explain the Project investment criteria a. Payback Period of Investment criteria b. NPV (net present value) criteria c. IRR (Internal Rate of Return) criteria
A new municipal refuse-collection truck can be purchased for $84,000. Its expected useful life is six years, at which time its market value will be zero. Annual receipts less expenses will be approximately $18,000 per year over the six-year study period. At MARR of 19%, calculate the benefit-cost ratio of the project.
. A hospital director is considering two alternative investment programs. Both have costs of $5,000 in year 1 only. Project 1 provides benefits of $2,000 in each of the first 4 years only. Project 2 provides benefits of $ 2,000 for years 6 to 10 only. a. Compute the net benefits using a discount rate of 6 percent. b. Knowing that the calculations are dependent on the discount rate, conduct a sensitivity analysis by re - calculating with a discount rate of 12 percent. Based on your calculations, which investment program should the director choose?
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.