How large an investment in the automation project

Reference no: EM13694594

A hospital would replace five personnel that currently cover three shifts per day. 365 days per year. Each person earns $35,000 per year. Company-paid benefits and overhead are 45% of wages. Money costs 8% after income taxes. Combined federal and state income taxes are 40%. Annual property taxes and maintenance are 2.5 and 4% of investment, respectively. Depreciation is 15-year straight line. Disregarding inflation, how large an investment in the automation project can be economically justified?

Reference no: EM13694594

Questions Cloud

Assume that the yield curve is initially upward-sloping : Assume that the yield curve is initially upward-sloping. Now suppose that the central bank announces a large monetary policy contraction. Given this information, we would expect which of the following to occur?

Production compares to the size of average total costs : How do you think the size of marginal costs of newspaper production compares to the size of average total costs? Explain your reasoning.

Higher the price of oil will be in next world oil shortage : “The more oil the US imports, the higher the price of oil will be in the next world oil shortage or crisis.” “The growing exports of off-season fruit from Chile, which now accounts for 80% of the US supply of such produce as winter grapes, are contri..

Differences provide a rationale for anti-trust legislation : How does the price and level of output for a monopolist differ from that of a purely competitive firm? Is this due to differences in the cost of doing business? Do these differences provide a rationale for anti-trust legislation? Explain.

How large an investment in the automation project : A hospital would replace five personnel that currently cover three shifts per day. 365 days per year. Each person earns $35,000 per year. Company-paid benefits and overhead are 45% of wages. Money costs 8% after income taxes.

Negotiation between management labor concerning labor wages : Suppose you have a negotiation between management an labor concerning labor wages. Management and labor do well when they each do the opposite of what the other does i.e the best situations for both are: (i) for management to bargain hard (offer low ..

How much would the firm be willing to pay for such a device : A device is invented that would reduce the firm's emissions to one unit for each town of output (e = q). How much would the firm be willing to pay for such a device?

Money supply and returning the nation to a gold standard : Some economists have called for a return to the gold standard (as a reminder, this would mean that every dollar would be backed by a certain amount of gold and, therefore, the money supply would be determined by the amount of gold owned in the countr..

Compute the before-tax equilibrium price and quantity : Suppose demand is given by QD = 100 – P and supply QS = P. If sellers pay a tax equal to 10, what is the after-tax supply? Compute the before-tax equilibrium price and quantity, the after-tax equilibrium quantity, and buyer’s price and seller’s price..

User Account

All Pages