Question

Pricing for MRI imaging varies greatly across countries, despite using the same equipment. Prices in the U.S. average over $2500 per MRI, while in India the price can be under $100 per MRI.

1. Calculate the annual fixed capital cost of an MRI machine and building space using the following assumptions:

Total capital cost of MRI machine and space: $1,000,000 Useful life until replacement: 8 years

Opportunity cost of invested capital: 6%

Research the use of Excel’s =PMT(rate, nper, pv) function and use it to calculate the annual cost. Report this as your answer to 1.

2. Calculate the average fixed equipment capital cost per MRI using the following assumptions: days per year: 261, and MRIs per day: 22

Answer 1

using Excel

a	Capital cost	1000000
	useful lives	8
	interest rate	6%
	Annual fixed cost	1,61,035.94
b	total days used	261
	PET Scans per day	22
	PET Scans use per year	5742
	Cost of PET Scan per use	28.05

Showing formula in excel

a	Capital cost	1000000
	useful lives	8
	interest rate	0.06
	Annual fixed cost	=PMT(C64,C63,-C62)
b	total days used	261
	PET Scans per day	=22
	PET Scans use per year	=C67*C66
	Cost of PET Scan per use	=C65/C68