The machine has a cost of 1500000 dollars but the Medicare payment for a surgical operation using the Robotic Surgery Machine is 2500 dollars and a surgical operation using a Robotic Surgery Machine has a lower cost per operation of 1250 dollars. a) Compute the total revenue the total cost and the profit at the end of each year if the hospital performs the surgical operations with the Robotic Surgery Machine. b) For simplicity assume the life of the machine is three years. In addition assume the opportunity cost of funds (interest rate) is 10% per year. Should the hospital buy the machine? Show less
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