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Exercise. Able Company's management is considering the purchase of a new machine at a cost of $165,000. The machine has a 5-year life expectancy and will generate additional sales of $75,000 per year and additional expenses other than depreciation of $25,000 (all cash). Depreciation will use the straight-line method. The discount rate is 10% Required: 1. Compute the Payback period. 2. Compute the Accounting Rate of Return. 3. Compute the Net Present Value. 4. Re-compute the payback period only if we assume that both revenues and cash expenses increase by 10% each year.

LESSON 102 Health Insurance Benefits A comprehensive health insurance plan includes hospital insurance, surgical-medical insurance, and major medical insurance. Most major medical policies have a deductible clause. A $250 deductible clause means that you must pay the first $250 of the amount not covered by your hospital and surgical-medical insurance. Most major medical policies also have a coinsurance clause. A typical one states that you must pay 20% of the amount remaining after you pay the deductible. Your insurance company pays the other 80%. AMOUNT PAID BY PATIENT - DEDUCTIBLE COINSURANCE AMOUNT Complete the table below. Total Medical BINI Amount Paid by Hospital and Surgical-Medical Insurance Major Medical Deductible Amount Subject to Coinsurance Coinsurance Rate Amount Pald by Patient DI 1. $18,540 $16.290 $250 25% 7 - 2. $29.950 $21,870 $200 10% 3. $ 9160 $ 8656 $200 20% 4. $62,241 $56,450 $100 30% 5. Paula Wiley had a total medical bill of 53260. Her hospital and surgical-medical insurance paid $2625. Her major medical has a $250 deductible and a 30% coinsurance clause. How much did Paula have to pay? 6. Pierre Waterman's last hospital stay had a bill of $14,816.91. His hospital and surgical-medical insurance paid $12,302.70. His major medical has a $150 deductible and a 20% coinsurance clause. How much did Pierre have to pay? 7. Rick Orland's comprehensive medical insurance includes hospital, surgical- medical, and major medical insurance. The major medical policy has a $200 deductible and 15% coinsurance clause. When Rick had surgery, his total bill was 517,540. The hospital and surgical medical provisions of his insurance policy covered S14,032. 2. Find the amount not paid by the hospital and surgical-medical insurance. b. Find the coinsurance amount paid by Rick c. Find the total amount paid by Rick. 8. Your comprehensive medical insurance includes hospital, surgical-medical. and major medical insurance. The major medical policy has a $350 deductible and a 20% coinsurance clause. You had an emergency appendectomy, and your total bill was $10.640 The hospital and surgical medical provisions of your Insurance policy covered 59044. How much did you pay?