Assignments questions:

3. Calculate NPV using discount rate of 7%. Take care to work out the values of future cash flows.

4. Complete Exhibits 2 & 3 for both projects - please bring your completed Exibits 2&3 sheets to the class. In the class you will discuss your assessments in groups first and then we will come up with the overall score for two proposals.

A. Physician Impact

Will this project have an effect on the physi- cians attitude toward the hospital? Yes_____ No____ (If no, proceed to Part B. If so, enter information about the extent of the impact, circle two answers below (one for non-acceptance and one for acceptance), and explain)

What is the scope of impact on the physicians?

___ a. ___ b.

Not Accepted:

-4 Intense and widespread negative reaction in the commu- nity will result in a severe blow to the hospitals im- age.

-3 A widespread negative effect on the hospitals general image and reputation will result.

-2 The hospitals image will be damaged among certain groups in the community.

-1 The attitudes of a few people will be negatively affected.

Accepted:

+1 Relatively few people will be positively affected.

+2 Some community groups will be favorably impressed.

+3 A widespread positive effect on the hospitals image and reputation will result.

+4 Significant and widespread positive community reaction will contribute significantly to the hospitals reputa- tion.

C. Employee Impact

Will this project have an effect on the attitude of the hospitals personnel? Yes__ No____ If yes, circle two answers below: one for non-acceptance and one for acceptance, and explain your answers.

Not Accepted:

-4 Major and widespread negative impact on employee mo- rale and attitude toward the hospital.

-3 Widespread disappointment with the hospital and some negative effects on the hospitals image among employ- ees.

-2 A limited group of employees (one or two departments) will react negatively.

-1 Relativelyfewemployeeswillbedisturbed.

0 No effect

Accepted:

+1 Relatively few employees will know about the decision but they will be pleased.

+2 A limited group of employees will be very pleased.

+3 Nearly all employees will be pleased.

+4 Majorandwidespreadpositiveimpactwithlong-term effects on employee attitude toward the hospital will re- sult.

___ c. Explain your answer in a memorandum.

Not Accepted:

-4 Theaffectedphysicianswillmovetheirpracticesto other hospitals.

-3 Theaffectedphysicianswilltendtoreducetheirprac- tices at the hospital.

-2 The affected physicians will be disgruntled and will dis- cuss the lack of the expenditure or project in the com- munity and with other physicians.

-1 The affected physicians will be aware of the lack of sup- port for the project, and will be less likely to believe that the hospital is maintaining a proper level of patient care.

0 No effect

Accepted:

1. +1 The affected physicians will be aware of the expenditure or project and will be satisfied that the hospital is main- taining a high level of patient care.

2. +2 The affected physicians will be very impressed and will discuss the expenditure or project favorably in the com- munity and with other physicians.

3. +3 Theaffectedphysicianswillmoderatelyincreasetheir practices at the hospital.

4. +4 The affected physicians will move their practices to the hospital.

B. Community Impact

Will this project have an effect on the commu- nity attitude toward the hospital? Yes_____ No____ (If no, proceed to Part C. If so, circle two answers be- low:onefornon-acceptanceandoneforacceptance,and explain)

For the exclusive use of I. Weber, 2022.

GREEN VALLEY MEDICAL CENTER Exhibit 2. Qualitative Evaluation

One or two physicians will be affected. The majority of the physicians in a hospital service will be affected