1. You operate a Continuing Care Retirement Community (CCRC) with Independent Living, Assisted Living, Skilled Nursing, and Memory Care. You are considering acquiring a successful Home Health Agency (HHA) for $5 million a. It earns $1 million a year in Net Income b. It generates $1.5 million a year in cash flows c. After 5 years you plan to sell it for $6 million d. Your cost of capital is 12%

o Based on each of the following methods, should you buy this HHA? a. Accounting ROR b. Payback c. NPV d. IRR

o What qualitative factors would affect your investment decision for this HHA in terms of: a. Competitive strategy b. Quality of care c. Industry trends d. Long-run sustainability

o What types of risks should you anticipate?

Would you recommend buying this HHA, and why?