You are the owner of a nursing home. You have watched Gold Cross make a fortune
ID: 2659400 • Letter: Y
Question
You are the owner of a nursing home. You have watched Gold Cross make a fortune ferrying your patients to doctors and the hospital. You think this is a business you want to get into. You estimate ambulance fees (your sales paid by the insurance company to you) for a year to be 350,000, actual cash expenses for staffing and operating the ambulance to be 325,000 per year. You can buy a used ambulance from the city for 75,000. If your required return is 12 percent and the life of the used ambulance is 4 years, what is the NPV and should you get into this business?
Explanation / Answer
You are the owner of a nursing home. You have watched Gold Cross make a fortune
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