Week 8 Assignment -
Capital Budget Analysis
Overview
For this assignment,
you will be provided with a spreadsheet containing projected numbers for two
different patient services programs. You will need to download theProgram
Projections [XLSX]spreadsheet
and use it to conduct your analysis.
Instructions
You are a member of
the financial services department at Benson Regional Medical Center. The chief
financial officer and chair of the capital budgeting committee, Dana Foster,
has requested that you perform some capital analysis of two proposed patient
service programs.
You have been provided
with a spreadsheet that covers much of the projected financials for each of the
proposed programs. Your task is to perform an analysis of that information and
provide your recommendation to the capital budgeting committee as to which
program they should pursue.
You have been asked to
create a presentation to present your findings to the capital budgeting
committee.
Using the provided
spreadsheet, complete a capital budgeting analysis on the information provided
in the spreadsheet. Specifically, you will need to identify a net present value
(NPV), internal rate of return (IRR), and a discounted payback period for
proposed Program #1 and Program #2. You will present your finding in a
presentation.
- Design a PowerPoint presentation for the
capital budgeting committee that includes all of the following:
- Create a brief 1–2 slide description of
the proposed programs.
- Develop a comparison between the cash
flow projects of each program from Year 0 to Year 5. Highlight the
differences.
- Compare the results and interpretation of
the discounted payback period between both programs.
- Compare net present value (NPV) for each
program.
- Compare the Internal rate of return (IRR)
for each program.
- Develop a recommendation for which
program the capital budgeting committee should take into consideration.
Include supporting rationale.
Formatting
Requirements
The presentation
should 8–10 slides in length and include speaker notes with each slide.
Resources
The Payback Period
in Microsoft Excel video
walks you through computing a payback period in Microsoft Excel for a proposed
capital investment.
The Solution 6:
Choose a Project Based on NPV, IRR, and Payback Period video walks you through choosing a project
based on NPV, IRR, and payback period.