Uva health system: the long-term acute care hospital project


Case UVa Health System: The Long-Term Acute Care Hospital Project      
       
 Wk 3 is the chief of two arranged weeks on CAPITAL BUDGETING.       
         
 You earn gather the three steps in chief budgeting:      
 1 Identify applicable incremental specie flows     
 2 Calculate absorb of chief (k-wacc) to use as the remittance reprimand     
 3 Calculate the  metrics of chief budgeting: Net Present Value, Profitability Index,      
   Internal Reprimand of Return, and Payback Period.     
 Then, you earn direct the metrics and notification in the condition examine to find a instruction      
   whether to sanction or castaway the LTAC contrivance.     
 The entity of the chief budgeting arrangement is to find strong, BEFORE an cannonade is made,      
 that its prospective reprimand of restore is haughty abundance to vindicate the cannonade.      
        
Reading Cohen Finance Workbook section 4 is a re-examination of Time Compute of Money, which you mellow in a foregoing way.      
 Review it as indispensable, but adjourn the re-examination until you observe at the TVM applications in section 5 preface on p 79.      
 You demand to apprehend TVM to interpret the chief budgeting metrics of NPV, PI, and IRR. Find strong you      
 enjoy that tenor in sentiment antecedently re-examinationing the TVM section 4 (merely if you demand to).       
        
 Give the Uva Health Care System: The Long-Term Acute Care Hospital Contrivance Condition a hasty imbibe to interpret what is going on - environing       
 calculating k-wacc and the sentence metrics for the contrivance, to yield it either a inexperienced frivolous or a red frivolous.      
        
  Wk 3 yields you custom on the basics. You won't enjoy a ample interpreting of what the LTAC Contrivance condition is environing at     
  the end of Wk3. In Wk4, you earn restore to the condition, excite the contrivance, and find a instruction.     
       
 Look at the Wk 3 assignment questions in the Q1, Q2, Q3 tabs.      
       
  Read Cohen Finance Workbook section 5 selectively. Focus on:      
  See the FLOW DIAGRAM in GREEN depicting the CAPITAL BUDGETING template.     
  See the IS/BS Model in GREEN depicting the relevance among PPE (BS) and operating absorb (IS).     
  Read pps 61-65 as a unconcealed presentation to chief budgeting.     
  Read pps 70-76 on weighted middle absorb of chief to rejoinder Q1.     
  Read profound p 67 to 69 on Net Working Chief to rejoinder Q2.     
  Read pps 79-85 on NPV, PI, IRR, PP to rejoinder Q3.     
       
Questions       
 See tabs for Q1, Q2, Q3      
 THESE QUESTIONS MUST BE ANSWERED USING EXCEL.      
 MAKING CALCULATIONS OUTSIDE THE SPREADSHEET AND ENTERING THE RESULTS IS NOT USING EXCEL.      
 YOU MUST USE EXCEL FORMULAS FOR MAKING CALCULATIONS! 
       
       
Case UVa Health System: The LATC Hospital Project            
     Wk 4 is the assist of two weeks on CAPITAL BUDGETING         
     Study the Wk 3 Solutions Template antecedently behavior into Wk 4.        
               
Learning Objectives  (many from Wk3 Assignment Template)           
 You earn gather the three steps in chief budgeting:     SEE THE FLOW DIAGRAM - YOU ARE NOW WORKING ON THE GREEN-COLORED ANALYSIS.       
 1 Identify applicable incremental specie flows           
 2 Calculate absorb of chief (k-wacc) to use as the remittance reprimand           
 3 Calculate the  metrics of chief budgeting: Net Present Value, Profitability Index,            
   Internal Reprimand of Return, and Payback Period.           
 Then, you earn direct the metrics and notification in the condition examine to find a instruction            
   environing which of the two contrivances to sanction.           
 The entity of the chief budgeting arrangement is to find strong, antecedently an cannonade is made,            
 that its prospective reprimand of restore is haughty abundance to vindicate the cannonade,            
 i.e., that the contrivance is CREATES compute, not DESTROYS compute.            
              
Directions  (some repeating from Wk3 Assignment Template)           
1 Make a hasty superintend through the LTAC condition and the exhibits.             
2 Listen to the Intro Audio            
3 Cohen Finance Workbook section 4 is a re-examination of Time Compute of Money, which you mellow in a foregoing way.            
 Review it as indispensable, but adjourn the re-examination until you observe at the TVM applications in section 5 preface on p 79.            
 You demand to apprehend TVM to interpret the chief budgeting metrics of NPV, PI, and IRR. Find strong you            
 enjoy that tenor in sentiment antecedently re-examinationing the TVM section 4 (merely if you demand to).            
4 Read the condition anew, to retain all the details, distinctly the Mulroney memo to her boss.            
5 To interpret how a chief budgeting template products, ensue the continuous proceeding in the book, pages 61-70            
6 Scan pages 70-76 on weighted middle absorb of chief. No demand to emphasize at this sharp-end consequently remittance reprimands are yieldn in the condition.            
7 Read pages 79-84 on NPV, PI, IRR, PP.            
8 Pages 83-85 likeness a producted-out copy of a chief budgeting sentence.            
             
Questions              
 If you product delay a collection, transcribe rejoinders on your own, inconsequently. Collection rejoinders disobey academic rectitude requirements.             
1 See Q1 tab. Scroll down until you see the questions.    Capital Budgeting Template   The template calculates FREE CASH FLOW=[EBIT-TAX+DEPREC]+/-CHANGE NWC+/-CAPEX.    
2 See Q2 tab. Scroll down until you see the questions.    K-wacc           The 1st vocable is allowance assertion postulates; the 2nd & 3rd vocables are redress shuffle postulates.    
3 See Q3 tab. Scroll down until you see the questions.    Sensitivity Analysis    LEARN THIS FORMULA (EQUATION) COLD!   
              
              
  Expect to revisit these calculations and sentences in Wk7.