A New Machine That Costs $172,100 Is Expected to Save

question 63

Multiple Choice

A new machine that costs $172,100 is expected to save annual cash operating costs of $40,000 over each of the next nine years.The machine's internal rate of return is:

• A)approximately 14%.
• B)approximately 16%.
• C)approximately 18%.
• D)approximately 20%.
• E)some other figure not noted abovE.

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Definitions:

Explanation of Benefits (EOB)

A document provided by insurance companies detailing what treatments/services were covered and what payment responsibilities the insured has.

Charge

The price or cost that someone has to pay for goods, a service, or admission to an event.

Third-Party Reimbursement

A phrase coined to indicate payment of services rendered by someone other than the patient. Today, the most common third-party payers are federal and state agencies, insurance companies, and workers’ compensation.

National Provider Identifier (NPI)

The name of the standard unique health identifier for health care providers.