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Computing The Break-Even Period of Medical Equipment

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Please help provide step by step calculations for each of these problems.

2. A new MRI machine costs $15,000 and is expected to generate $4,000 in profit each year for the next 6 years.

2a. What is the breakeven period (in months)?

A new electronic medical records system costs $12,500 and is expected to reduce labor costs by $4,000 each year for the next 3 years.

2b. What is the breakeven period (in months)?

A new kidney dialysis machine costs $207,000 and is expected to generate $19,250 in profit each year for the next 12 years.

2c. What is the breakeven period (in months)?

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Solution Summary

This solution illustrates how to compute the break-even period of medically-related expenditures. Step by step calculations are given for each.

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2a. What is the breakeven period (in months)?
The profit earned is $4,000 per year, or $4,000/12= $333.33 per month. The break-even period in months is thus ...

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