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CAPITAL BUDGETING Suppose you are the Chief Financial Officer (CFO) in the Memorial Hospital of North Bend (MHNB) The Hospital is planning to build a
CAPITAL BUDGETING Suppose you are the Chief Financial Officer (CFO) in the Memorial Hospital of North Bend (MHNB) The Hospital is planning to build a new facility, the Children's Cancer Center, in down town. The MHNB Board of Trustees (BOT) asked you to evaluate this project. To assess the project, you will conduct a Cost-Benefit Analysis (CBA) and will report the CBA result to the MHNB Board of Trustees (BOT) Based on your recommendation/report, the Board of Trustees will decide whether the Hospital will build the Children's Cancer Center or not. For conducting a CBA, you did some research by conducting statistical data analyses, reading related academic journals, and contacting other economists. Afterward, you have obtained the following cost and benefit items and their monetary values over time Costs of the proiect Cost item Estimated Value (annually) Year Construction cost of the Children's Cancer Center Traffic congestion during construction period Maintenance cost of the Center Hiring more doctors and nurses Purchasing more equipment 2018 (Current year) 2018 (Current year) 2019-2029 2019-2029 2019-2029 $ 50 $ 10 $20 Benefits of the proiect Benefit item Estimated Value (annually) Year Increased profits Increased donations $35 $12 2019-2029 2023-2029
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