A company is considering the purchase of a new machine that will enable it to increase its expected sales. The machine will have a price of $100,000. In addition, the machine must be installed and tested. The costs of installation and testing will amount to $10,000. The machine will be depreciated using 3-years MACRS. (Use MACRS table from class excel exercise by copying the table and pasting it) The equipment will be operated for 5 years. The sales in the first year of operation are expected to be $260,000. Then, sales will grow by 3% a year. The annual operating costs (before depreciation) will consist of fixed operating costs of $25,000 plus variable operating costs equal to 70% of sales. To support the increased level of production, the inventory of raw materials will have to be increased from $30,000 to $50,000 when the machine is purchased. The additional inventory will be carried until the machine is scrapped following the 5 years of operation. At the end of the 5-year operating life of the project, it is assumed that the equipment will be sold for $40,000. The tax rate is 40% and the company’s weighted average cost of capital is 9%. Build a capital budgeting model to answer the following questions:

1) What is the operating cash flow in year 1-5?

2) What is the initial outlay in year 0?

3) What is the after tax salvage at the terminal year?

4) Calculate NPV and PI for the project. Check points: NI in year 2 = $3,834 IRR = 26.73%

Bonus: Using data table show the effect of changes in CGS on NPV for the project Start with CGS of 30% stepping by 5% and stopping at 70%.

Natural Language Processing (NLP), is not a new technology, but it is one that is not yet fully developed. Many healthcare professionals and organizations are working diligently on how to combine NLP with use in EMRs.

• What is NLP?
• What possible disadvantages will occur due to using NLP technology?
• What are the barriers to using NLP?
• What possible benefits will NLP provide to medical professionals and organizations?
• How can NLP benefit the patient experience?

What are characteristics of the new view of accounting in 1970's?

What is the effect of new technology on consumer electronics market?

A dental assistant is working with a dentist in the examination of a new patient. The patient has a severely abscessed tooth and will require extensive root canal work. As the assistant prepares for the invasive procedure, the patient mentions that his partner has recently died of AIDS and that he, too, has AIDS. The assistant freezes. He is afraid of getting infected with the AIDS virus.

Discuss the potential role of an ethics committee and a quality assurance program in this case.

Describe which type of ethics you would subscribe to as it relates to this case and why.

ANSWER ALL QUESTIONS RELATED TO THE SITUATION

At the beginning of the baseball season in a particular year, the odds that the New York Yankees will win the American League pennant are 6 to 3.

(a) What are the odds that the Yankees will lose the pennant?
___________ to __________?

(b) What is the probability that the Yankees will win the pennant? Express your answer as a decimal.


(c) What is the probability that the Yankees will lose the pennant? Express your answer as a decimal.

You are a member of the committee that will determine the needs for a new pharmacy system for the hospital. Describe in about 10-12 lines the steps of the process and the important issues which the committee should study during the "needs assessment phase" of the project.

1. A new well is to be drilled in a developed area. The production data for a typical well in the area is shown in the Table below. These are used to forecast the production of the new well over an 11 year life. The initial production rate for wells in the area is bellow the allowable rate and thus there is no period of constant rate production. Other data are as follows:

Crude oil price = $30 per barrel

Royalty = 20%

Operating cost = $1500 /well/month

Mineral tax = 7% of gross working interest income

Investment = $440,000

1. Using midyear discount rate, calculate the ROR (Rate of Return)
2. Assume total production of 50,000 barrels, calculate the profit-to-investment ratio.