question archive The Atlantic Medical Clinic can purchase a new computer system that will save $9,000 annually in billing costs
The Atlantic Medical Clinic can purchase a new computer system that will save $9,000 annually in billing costs
Subject:AccountingPrice: Bought3
The Atlantic Medical Clinic can purchase a new computer system that will save $9,000 annually in billing costs. The computer system will last for ten years and have no salvage value. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: What is the maximum price (i.e., the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic Medical Clinic should be willing to pay for the new computer system if the clinic's required rate of return is: (Round your final answers to the nearest whole dollar amount.) Maximum Price 1. Six percent 2. Eight percent
