You have been hired in the finance department at a large, metropolitan, for-profit hospital. Your duties are very important to the entire hospital in terms of financing operating costs. Additionally, you are also in charge of 3 employees who work under you to help with the day-to-day accounting activities. Your role includes budgeting, managing the general ledger accounts, utilizing financial formulas to perform accounting activities, and training and development of your 3 employees. This professional career is exciting and challenging for you but is also enjoyable and rewarding as you work your way up the career ladder toward reaching your goal of becoming the Chief Executive Officer (CEO) of the hospital.
Due to scarce resources, your organization is faced with the decision of choosing between mutually exclusive projects (i.e., build a rehab center or build a neonatal wing). You have been asked to develop a financial analysis of the two projects based on Net Present Value (NPV), Return on Investment (ROI), and Profitability Index (PI). Briefly explain the following concepts and their use/value in assessing the validity of the two mutually exclusive projects:
Submitting your assignment in APA format means, at a minimum, you will need the following:
Healthcare Finance Management
Course Code and Name
This investigation will explicate two projects within a medical healthcare institution with the aim of developing a financial analysis of two projects, based on Net Present Value (NPV), Return on Investment (ROI), and Profitability Index (PI). The projects analyzed are a Rehabilitation Center and the healthcare neonatal wing. From this analysis, the best project amongst the two would be selected as the best option for the Healthcare facility based on resulting readings of NVP, PI and ROI.
A healthcare facility or hospital can be found in every state within the US. Since a lot of these facilities often face insufficient facilities within different sectors such as the financial positions, the facilities’ operations deteriorate progressively and finally affect the whole center. Because of this, the finance department has decided to put up two projects in order to avert the financial disbursement issue. The additional investment projects to be evaluated are a Rehabilitation Center and a healthcare neonatal wing
Both these projects are mutually exclusive, that is, acceptance of one will make the other out of consideration. Projects are said to be mutually exclusive when they cannot be undertaken simultaneously.
The table below provides data and information analyzing the two investment projects (Figures provided are not real but assumed for purposes of calculations.………