Brooks clinic is considering investing in new heart-monitoring equipment. it has two options. option a would have an initial lower cost but would require a significant expenditure for rebuilding after 4 years. option b would require no rebuilding expenditure, but its maintenance costs would be higher. since the option b machine is of initial higher quality, it is expected to have a salvage value at the end of its useful life. the following estimates were made of the cash flows. the company’s cost of capital is 5%.

option a option b
initial cost $196,000 $291,000
annual cash inflows $72,500 $82,500
annual cash outflows $28,000 $25,600
cost to rebuild (end of year 4) $49,100 $0
salvage value $0 $8,500
estimated useful life 7 years 7 years

compute the
(1) net present value
(2) profitability index
(3) internal rate of return for each option. (hint: to solve for internal rate of return, experiment with alternative discount rates to arrive at a net present value of zero.) (if the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). round answers for present value and irr to 0 decimal places, e. g. 125 and round profitability index to 2 decimal places, e. g. 10.50. for calculation purposes, use 5 decimal places as displayed in the factor table provided.)

The purpose of safety stock is to: a. eliminate the possibility of a stockout. b. control the likelihood of a stockout due to variable demand and/or lead time. c. eliminate the likelihood of a stockout due to erroneous inventory tally. d. protect the firm from a sudden decrease in demand. e. replace failed units with good ones.

Imagine us is a startup that offers high definition 3d prenatal ultrasounds for high-end customers. the service process includes four activities that are conducted in the sequence described below. (the time required for each activity is shown in parentheses): activity 1: welcome a patient and explain the procedure. (20 minutes)activity 2: prep the patient (e.g., show them to the room, apply ultrasound gel). (17 minutes) (*your id number represents the amount of time needed to complete this task)activity 3: take images. (5 minutes)activity 4: discuss diagnostic with patient. (20 minutes)at each location there are employees (servers) s1, s2, and s3. the assignment of tasks to servers is the following: s1 does activities 1 and 2.s2 does activity 3.s3 does activity 4.a. what is the capacity of this process (in customers per hour)? b. suppose 3 patients arrive every hour on average. ignoring any “start of day” or “end of day” effects, what are the utilizations of all three servers (%)? c. suppose each activity can be done by any server and any server can do any set of activities. however, each activity is done by only one server. for example, a possible assignment includes: s1 does activity 1, s2 does activity 2, and s3 does activities 3 and 4. of course, the original assignment of servers to activities is also feasible. what is the maximum capacity of the process (in customers per hour)? d. now consider the capacity measures in (c) and (a), what is the percentage change? why can you improve capacity without using additional resources? (there is no free lunch, right? )note: for all hw assignments, show your process of getting the results. only providing the final answers is not acceptable and will get 0%. if necessary, use a separate sheet of paper to show your work.

Later movers do not face: entrenched competitors. reduced uncertainty over technologies. high growth markets. lower market uncertainty.