Base case Scenario

Student VersionCopyright 2014 HealthAdministration PressCORAL BAY HOSPITALTraditional Project AnalysisThis case illustrates a complete capital budgeting analysis, including cash flow analysisand profitability measures. Note the model extends to Column I.The model consists of a complete base case analysisno changes need to be madeto the existing MODEL-GENERATED DATA section. However, all values in the studentversion INPUT DATA section have been replaced with zeros. Thus, students must determinethe appropriate input values and enter them into the model. These cells are colored red.When this is done, any error cells will be corrected and the base case solution will appear.Note that the student version does not contain any risk analyses, so students will have tocreate their own if required by the case. Furthermore, students must create their owngraphics (charts) as needed to present their results.INPUT DATA:KEY OUTPUT:Land initial costLand opportunity cost (and salvage value)Building/equipment costBuild/equipment salvage valueProcedures per dayAverage net patient revenue per procedureLabor costsUtilities costsIncremental overheadSupply cost ($/procedure)Inflation rate on net patient revenueInflation rate on costsTax rateRevenues lost from inpatient surgeriesReduction in inpatient surgery costsCost of capital$175,000$200,000$10,000,000$5,000,00020$1,000$918,000$50,000$61,000$2003.0%3.0%40.0%$1,000,000$500,00010.0%NPVIRRMIRRPaybackDeprec.Expense$2,000,0003,200,0001,900,0001,200,0001,100,000600,000$821,19012.7%11.7%4.1End of YearBook value$8,000,0004,800,0002,900,0001,700,000600,0000MODEL-GENERATED DATA:Depreciation Schedule:Year123456MACRSFactor0.200.320. Cash Flows:Land opportunity costBuilding/equipment costNet patient revenue (including inpatient loss)Less: Labor costsCost savings on inpatientsUtilities costsSuppliesIncremental overheadDepreciationIncome before taxesTaxesProject net incomePlus: DepreciationPlus: Net land salvage valuePlus: Net building/equipment salvage valueProject Cash Flows0($200,000)(10,000,000)12345$4,000,000918,000(500,000)50,0001,000,00061,0002,000,000$471,000188,400$282,6002,000,000$4,120,000945,540(515,000)51,5001,030,00062,8303,200,000($654,870)(261,948)($392,922)3,200,000$4,243,600973,906(530,450)53,0451,060,90064,7151,900,000$721,484288,594$432,8901,900,000$4,370,9081,003,123(546,364)54,6361,092,72766,6561,200,000$1,500,128600,051$900,0771,200,000$4,502,0351,033,217(562,754)56,2751,125,50968,6561,100,000$1,681,132672,453$1,008,6791,100,000190,0003,240,000Net cash flow($10,200,000)$2,282,600$2,807,078$2,332,890$2,100,077$5,538,679Cumulative net cash flow(For payback calculation)($10,200,000)($7,917,400)($5,110,322)($2,777,432)($677,355)$4,861,325Profitability and Breakeven Measures:Net present value (NPV)Internal rate of return (IRR)Modified IRR (MIRR)$821,19012.7%11.7%Payback4.1ENDAssume all assumptions as stated in the Case (Base Case Scenario).Assume Coral’s cost of capital at 14%.Show all dollar figures in thousands of dollars with one decimal point.($ in 000.0)Include in your analysis the following:a. List all your assumptions (Base Case Scenario). ( 1 page)b. Include a spreadsheet showing Depreciation each year ( 1 page).c. Include a spreadsheet showing the Revenue model for next 5 years. ( 1 page).d. Projected income statements ( 5 years) for the surgery center. ( 1 page).e. Projected Cash Flows year-by-year. ( 1 page).f. Include decision parameters such as IRR, NPV & Pay-back period. ( 1 page)Using the "Best Case",as seen in the case# of procedures/dayAverage Revenue per procedureSalvage Value (after 5 years) -Bldg & Equip.All other assumptions are same as the Base Case Scenario.Calculate questions 1a to 1f assuming Best Case Scenario

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.
Get My Paper
Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

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.

Money-back guarantee

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.

Read more

Zero-plagiarism guarantee

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.

Read more

Free-revision policy

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.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Live Chat+1 763 309 4299EmailWhatsApp

We Can Handle your Online Class from as low as$100 per week