Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 2

Transporting extremely heavy patients (people who weigh more than 500 pounds) is much more difficult than transporting normal-weight patients. Various cities in Colorado, Nebraska, and Kansas charge $1421 for an extremely obese patient compared to $758 for a typical patient. The extra fees are justified by the ambulance companies on the basis of the specialty equipment required and the extra personnel involved. If it is assumed that 50 extremely obese patients are transported every year, how much could the ambulance companies afford to spend on the specialty equipment now and break even on the initial cost in 5 years just from the extra charges Assume the extra costs are $400 per patient and the company's MARR is 10% per year.