A large community hospital is considering buying a robot to perform robotic surgeries

| March 31, 2017

Question
A large community hospital is considering buying a robot to perform robotic surgeries. The cost of the technology is $20 mil, the set-up costs are $0.5 mil. The management estimates that it will cost them about $5 mil in foregone revenue to train physicians and other staff to operate the unit in the first year of operation. After that, the robot is expected to bring $3 mil per year that will grow at 7% annually. The cost of capital is 10%.
Should the hospital pursue this investment? Why or why not?

Get a 30 % discount on an order above $ 50
Use the following coupon code:
COCONUT
Order your essay today and save 30% with the discount code: COCONUTOrder Now
Positive SSL