HCM301 CSU Understanding Healthcare Financial Management Analysis Please complete the two problems below, using excel and excel formulas.
UNDERSTANDING HEALTHCARE FINANCIAL MANAGEMENT
Chapter 12 — Project Risk Analysis
PROBLEM 3
Consider the project contained in Problem 7 in Chapter 11 (California Health Center).
a. Perform a sensitivity analysis to see how NPV is affected by changes in the number of procedures per
day, average collection amount, and salvage value. Remember supplies vary with number of procedures.
b. Conduct a scenario analysis. Suppose that the hospital’s staff concluded that the three most uncertain
variables were number of procedures per day, average collection amount, and the equipment’s salvage
value. Furthermore, the following data were developed:
Equipment
Number of
Average
Salvage
Scenario
Probability
Procedures
Collection
Value
Worst
0.25
10
$60
$100,000
Most likely
0.50
15
$80
$200,000
Best
0.25
20
$100
$300,000
c. Finally, assume that California Health Center’s average project has a coefficient of variation of NPV in
the range of 1.0 – 2.0. (Hint: Coefficient of variation is defined as the standard deviation of NPV divided
by the expected NPV.) The hospital adjusts for risk by adding or subtracting 3 percentage points to its
10 percent corporate cost of capital. After adjusting for differential risk, is the project still profitable?
d. What type of risk was measured and accounted for in Parts b. and c.? Should this be of concern to the
hospital’s managers?
ANSWER
9/1/14
UNDERSTANDING HEALTHCARE FINANCIAL MANAGEMENT
Chapter 14 — Financial Forecasting
PROBLEM 1
Florida Home Health is a small home care agency owned by a group practice of nurses and physical
therapists in Tampa, Florida. During the past few years, the company reported the following revenues:
Year
Revenues (thousands)
1
$2,058
2
$2,534
3
$2,472
4
$2,850
5
$3,000
6
?
Predict Florida Home Health’s Year 6 revenue.
ANSWER
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
