# HS440 Finance for Healthcare

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# HS440 Finance for Healthcare

## Description

You are considering the purchase of a new MRI machine for Bayside Memorial Hospital. Think about what types of patients you will see, what types of care you will provide, and the team members you have assembled. Remember, the financial analysis provides much of the guidelines for all decision making in the purchase decision. Your goal will be to write a elevator pitch of your recommendation to the organization’s CEO and to persuade them toward your point of view.

Instructions

Using the chart of cash revenues and costs, read and understand the cash flow analysis results. Then provide your decision on whether to make the purchase or not. You will frame this recommendation in a speech to your boss, the CEO of the organization.

Cash Revenues and Costs:

0

1

2

3

4

5

System cost

(\$2,000,000)

Installation expenses

(500,000)

Total Cost

(\$2,500,000)

Net revenues

\$750,000

\$787,500

\$826,875

\$868,219

\$911,630

Labor costs

(60,000)

(63,000)

(66,150)

(69,457)

(72,930)

Maintenance cost

1. (150,000)

(157,000)

(165, 375)

(173,644)

(182,326)

Supplies

(30,000)

(31,500)

(33,075)

(34,729)

(36,465)

1. Net operating income

\$510,000

\$535,500

\$562,275

\$590,389

\$619,908

Salvage value

750,000

Net cash flow

(\$2,500,000)

\$510,000

1. \$535,500

\$562,275

\$590,389

\$1,369,908

Profitability Measures:

Net present value: \$82,493

Internal rate of return = 11.1%

Criterion 1: Cash Flow Analysis

Provides a financial analysis of the chart of cash revenues and costs and shows and understands the cash flow results.
? Includes two or more examples and provides a logical financial analysis showing an understanding of the cash flow results.
? Provides a logical recommendation based on the facts presented

.Criterion 2: Recommendation

1. Provides a clear recommendation on whether to accept or reject the project, including two or more reasons for the recommendation

Criterion 3: Quality of delivery

Pitch is clear, well-articulated, well-paced, and appropriately projected, includes two or more examples.
? Displays values of respect, compassion, justice, and community pride in the care of the patient.

HS440_1804A_-4.1: Utilize financial analysis to inform management decisions.

Student work demonstrates the ability to utilize financial analysis to inform management decisions, including analysis and interpretation (identifying critical values, identifying patterns, etc.) of existing data presented through common financial reports. Student is able to utilize that analysis to support and recommend decisions for a healthcare organization.

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