QuestionCalculations: Analytic Methods for Financial Decision Making

Calculations: Analytic Methods for Financial Decision Making
Determining how to make a capital investment decision using financial
techniques is an essential aspect of long-term financial decision
making.

To prepare for the Calculations, review the sections of Chapter 7
(“The Investment Decision”) from your Financial Management of Health
Care Organizations: An Introduction to Fundamental Tools, Concepts,
and Applications textbook that explain how to analyze capital
investment decisions using financial techniques. (The pertinent
section of Chapter 7 to review for each type of Calculation is
identified in the below list of Calculations.) Then, read scenario #15
(Kaiser Oakland Practice) on page 329, which contains the information
that you will use to populate and perform the Calculations.

Complete the following Calculations and submit your completed
Calculations in an Excel spreadsheet with three tabs—one tab for each
of the following Calculations and with that particular tab reflecting
only the result of that particular Calculation.

1. Determine the payback for both projects.

Note: For detailed information on how to perform this type of
Calculation, review the section “Payback Method” and Exhibit 7-2 “Cash
flows for two alternative project investments” and Exhibit 7-3
“Calculation of payback year for two alternative investments” on pages
308 and 309, respectively, of the Financial Management of Health Care
Organizations: An Introduction to Fundamental Tools, Concepts, and
Applications textbook.

2. Determine the IRR for both projects.

Note: For detailed information on how to perform this type of
Calculation, review the section “Unequal cash flows” and Exhibit 7-8
“Using Excel to Calculate the IRR…that yields unequal operating cash
flows…” (This can also be used for equal cash flows) on page 318-319
of the Financial Management of Health Care Organizations: An
Introduction to Fundamental Tools, Concepts, and Applications
textbook.

3. Determine the NPV at a cost of capital of 12 percent for both
projects. Which project should be chosen? Explain.

Note: For detailed information on how to perform this type of
Calculation, review the section “Using spreadsheets to calculate NPV”
and Exhibit 7-6 “Using Excel to calculate the net present value of
unequal annual cash flows” (This can also be used for equal annual
cash flows) on page 316 of the Financial Management of Health Care
Organizations: An Introduction to Fundamental Tools, Concepts, and
Applications textbook.

Save your Calculations as a “.xls” file. Submit your Calculations by
Day 7 of Week 5.

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.