Humana Hospital Corporation installed a newMRI machine at

QUESTION:

Humana Hospital Corporation installed a newMRI machine at a cost of $750,000 this year in itsmedical professional clinic in Cedar Park. Thisstate-of-the-art system is expected to be used for5years and then sold for $125,000. Humana uses areturn requirement of 25% per year for all of itsmedical diagnostic equipment. As a bioengineeringstudent currently serving a coop semester onthe management staff of Humana Hospital Corporationin Louisville, Kentucky, you are asked todetermine the minimum revenue required eachyear to realize the expected recovery and return.(a) What is your answer?(b) If the AOC is expected to be $80,000 peryear, what is the total revenue required toprovide for recovery of capital, the 25% return,and the annual expenses?(c) Write the spreadsheet functions to displayyour answers.