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Nt1310 Unit 2 Case Study

Decent Essays

PROBLEMS:
From the article, both machines run faster, produce clearer films and meet all safety standards. So making a choice on which machine to buy will be based on other factors rather than these. Which machine brings the greatest benefit to the hospital and which is paid for by itself are among the factors to consider. Whichever one l chose between the two, I will have to deal with a problem called opportunity cost. Both the mammogram and the MRI machines cannot be purchased at the same time. The current budget allocated to the department cannot take care of both machines. This means one of machines will have to be selected over the other. Opportunity cost is the benefit, profit, or value of something that must be given up to acquire or achieve something else. (www.Businessdictionary .com) If l chose the mammogram machine over the MRI machine, then the opportunity cost is letting go of the MRI machine.
ADDITIONAL DATA
Recording and analyzing costs as well as expenses will be additional information that l will need to consider before making the choice between the mammogram …show more content…

Slide 28 of the same chapter also says that there are at least two questions that need to be asked with every capital budget. The two questions are; does the asset at least pay for itself and does the asset add value to the organization? We know that both projects are capital projects since their useful lives will be more than one year and also both will add value to the organization. However, from the available information, one of the machines will not pay for itself. The mammography program will give the poor and low income the opportunity to have examinations that they can’t afford. However, compared to the MRI machine, it does not pay for itself because no revenue will be realized from its

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