Healthcare Financial Management and Economics Week 10 Assignment-Capital Budgeti

Question

Healthcare Financial Management and Economics Week 10 Assignment-Capital Budgeting There are many options to buy capital, including cash purchases, loans, leasing, and other forms of payment. Your goal as a healthcare manager is to determine method is best for your organization, given its your organization, given its financial and organizational structure (i.e. techniques that may help you determine how and when to invest in new capital. For thits Assignment, you examine these concepts as they pertain to the healthcare industry Assig for-profit or not-for-profit). Time value of money and net present value are To prepare for this Assignment: Review this week's Learning Resources. Reflect on concepts of time value of money net present value, internal rate of return, and purchasing options. The Assignment: Using an Excel spreadsheet to show your work, answer the following questions: 1. If a physician deposits $24,000 today into a mutual fund that is expected to grow at an annual rate of 8%, what will be the value of this investment: a. 3 years from now b. 6 years from now c. 9 years from now d. 12 years from now 2. The Chief Financial Officer of a hospital needs to determine the present value of $120,000 investment received at the end of year 5. What is the present value if the discount rate is: 3% a. b. 6% C.9% d. 12% Calexico Hospital plans to invest $1.8 million in a new MRI machine. The MRI will be depreciated over its 5-year economic life to a $200,000 salvage value Additional revenues attributed to the new MRI will be in the amount of $1.5 million per year for 5 years. Additional operating expenses, excluding depreciation expense, will amount to $1 million per year for 5 years. Over the life of the machine, net working capital will increase by $30,000 per year for 5 years. 3. 02015 Laur

Explanation / Answer

1. a . Value of the investment after 3 years : fv(rate,nper,pmt,pv) =fv(0.08,3,0,24000) = 30,233.09

b . Value of the investment after 6 years : fv(rate,nper,pmt,pv) =fv(0.08,6,0,24000) = 38,084.98

c. Value of the investment after 9 years : fv(rate,nper,pmt,pv) =fv(0.08,9,0,24000) = 47,976.11

d. Value of the investment after 12 years : fv(rate,nper,pmt,pv) =fv(0.08,12,0,24000) = 60,436.08

2.a. Present value of an innvestment of 120,000 for 5 year at 3% interest = pv(rate,nper,pmt,fv) =pv(0.03,5,0,120000) = 103,513.05

b. Present value of an innvestment of 120,000 for 5 year at 6% interest = pv(rate,nper,pmt,fv) =pv(0.06,5,0,120000) = 89,670.98

c. Present value of an innvestment of 120,000 for 5 year at 9% interest = pv(rate,nper,pmt,fv) =pv(0.09,5,0,120000) = 77,991.77

d. Present value of an innvestment of 120,000 for 5 year at 12% interest = pv(rate,nper,pmt,fv) =pv(0.12,5,0,120000) = 68,091.22

Note: we have answered 8 sub-question covering 2 full questions. Kindly repost each seperately for experts to answer

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.