Case study Healthcare Finance 20 procedures per day Labor cost \\( \\$ 918,000 \\) per year if open 250 days a year Cost of capital \2 Land initial cost \\( \\$ 150,000 \\) Land opportunity cost (salvage value) 25,000 to clear land and put in sewer lines Building/ equipment cost just for 4 operating suites cost is 5 million dollars, but equipment cost is another 5 million dollars total 10 million Build/ equipment salvage value 5 million before taxes excluding the land Average net patient revenue per procedure \\( \\$ 1,000 \\) Utilities cost \\( \\$ 50,000 \\) per year Incremental overhead \\$51,000 Supply cost (\\$/procedure) \\$200 Inflation rate on cost \3 Tax rate \40 federal and state combined Revenue lost from inpatient surgeries 1 million Reduction in inpatient surgery cost 500,000 1. What are the NPV,IRR, MIRR, and payback of the proposed ambulatory surgery center? Do the measures indicate acceptance or rejection of the proposed ambulatory surgery center? \\( \\mathrm{NPV}=3,991,788 \\) IRR \=13.2 MIRR \=9.1 Payback is 4.1 2. Jules Bergman is aware that there are some qualitative factors that are relevant to the surgery center decision. What qualitative factors might support project acceptance? What qualitative factors might preclude project acceptance? 3. Considering all points, would you build the ambulatory surgery center? 4. In your opinion, what are the three key learning points from this case