The questions are stated at the end of the case find in Ambulatory Surgical Center at Newton Community Hospital file.
There are two parts to the assignment.
Part 1: Using the Excel worksheet template provided calculate the NPV and the Contribution Margin using the data provided in the case.
Part 2: A document for responding to the case questions based on the Excel calculations and the information in the case.
Must indicate team members who contributed to working on the Excel worksheet and individual contributions using a 1-5 scale. 5 indicates V. high effort, 4 indicates mid-level effort, 3 indicates less than mid-level effort and 1 indicates limited to no effort.
Questions
1) Using the data provided in this case, fill in the Excel worksheet template provided with this assignment.
2) Calculate the Net Present Value.
3) Respond to Mr. Cruz’s question, “Does Newton Community have sufficient cash balances to cover the forecast risks in the initial three years before ASC operations reach full capacity?” Note, the data used for the NPV analysis are estimates. Therefore, your answer should incorporate the risk associated with forecasting errors.
4) Is the trend in contribution margin a source of concern for the team? Explain why.
5) Based on your analysis offer your recommendation of whether Newtown Community Hospital would rationally invest in the ASC.
6) Respond to Mr. Cruz’s question, “What crucial assumption if altered, could change the outcome of the analysis”, by a) identifying one crucial assumption underlying the analysis, b) changing that assumption to a more realistic value and c) recalculating the Net Present Value based on the altered assumption.