A Large Radiology Group Wants to Offer a SuperScanner Service

question 29

Multiple Choice

A large radiology group wants to offer a SuperScanner service. The SuperScanner has an expected life of six years. Based on the expected volume of 400 scans per year, the group's accountant determines that the breakeven point is 7.2 years. What should the group do?

• A) Depreciate the SuperScanner over eight years.
• B) Increase the charge for a SuperScanner exam.
• C) Add more radiologists to the group to bring in more patients.
• D) Give up the SuperScanner plan at this time.

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Definitions:

Equilibrium Interest Rate

The equilibrium interest rate is the rate at which the demand for funds equals the supply of funds in the financial markets, balancing savings and investments.

Loanable Funds

The total amount of financial capital available for borrowing in financial markets.

Investment Projects

Initiatives undertaken by individuals, companies, or governments to allocate resources in the expectation of future financial returns.

Usury Laws

Regulations that set maximum interest rates which can be charged on loans, to protect borrowers from excessively high rates.