Capital Cash Flow Estimation Exercise
Information to Solve Case
1) Assume Bloomington Indiana Mellencamp Health System, a not-for profit hospital, is evaluating a new MRI.
2) Cost
|
Purchase price |
$500,000 |
|
|
Shipping and Install |
$80,000 |
|
| 3) Expected life |
|
5 years |
|
| 4) Salvage Value |
|
$250,000 |
|
| 5) Utilization |
|
6000 scans per year |
|
| 6) Net Revenue |
|
$150 per scan |
|
| 7) Variable Cost |
|
$75 per scan |
|
| 8) Fixed cost |
|
$150,000 |
|
| 9) Corporate cost of capital |
12% |
|
|
|
|
|
|
Calculate the operating cash flow.