City of Hope Hospital is planning to invest in a Forms Management technology to help streamline their forms management processes The investment is costly, yet it will bring some benefits to the organization There are both hard and soft benefits to the investment You were asked to make an investment decision based on the net present value (NPV) and internal rate of return (IRR) One of your analysts collected some information and estimated costs and benefits of the system over five years In the Excel file called HW4 xls, sheets named benefits and costs summarize the collected information Your task is to fill in the sheet called 5 yr summary Then, you need to check the ROI summary sheet to make a recommendation to the upper management Fill in All the yellow cells based on the costs and benefits provided in the respective sheets in the same excel file Do not touch the red cells Note that, you need to repeat the calculations for both hard and soft benefits and hard benefits only (check the excel file to better understand what is meant) Based on the calculations, what are your findings and recommendation to the management Please take a screenshot of your filled tables to your answer sheet and provide discussion Below are some more instructions to help Gross Financial Benefits and Project Costs rows directly take values from Benefits and Costs sheets, respectively Net Financial Benefits are defined as benefits costs for each year NPV by year is the net financial benefits for a year with a discount applied (for example if discount rate is 11 , the NPV in year x is net financial benefit in year x (1 0 11) (x 1) As an example, Cumulative NPV for year 3 is the total of NPV for years 1 to 3 Now update the benefits for printshop reduction in the benefits sheet to 25000, 120000, 200000, 200000, and 200000 for years 1 to 5 What are your findings and recommendation to the management For both part a and part b, conduct sensitivity analysis around the discount rate by trying several values of your choice Does the net present value change Does your recommendation change BIU 3 Merge Center $ 580 Conce Forma Clipboard Font Alignment Number G35 MIRR(B32 F32,) 1 City of Hope Financial Business Case 2 7 Year Summary 3 Forms Management 4 10 11 19 5 Discount Rate 11 00 6 Do Not enter data into sheet calculations from Benets Coats Worksheets Year 1 Start Year 2013 10 Gross Financial Benefits 11 Costs Savings Avoidance (Hard Benefits) 12 Cost Savings Avoidance (Soft Benefits) Year 2 2014 Year 3 2015 Year 4 2016 Year 5 2017 5 Year Total 13 14 Total Gross Financial Benefits 15 Total Gross Financial Benefits (excluding Soft) 17 Project Costs 18 Operating costs 19 Capital Costs 21 Total Project Costs Exceeds 5 years 23 Calculations Below include hard soft benefits 24 Payback (years) 25 Net Financial Benefits 26 NPV by Year (11 discount rate) 27 Cumulative NPV 28 IRR DIV 0 Exceeds 5 years 30 Calculations Below includes only hard ben 31 Payback (years) 32 Net Financial Benefits 33 NPV by Year (11 discount rate) 34 Cumulative NPV 35 IRR 5 Yr Summary ROI Summary Benefits Costs Ready A HIDUPNS000 BIU 3 Merge Center $ 580 Conce Forma Clipboard Font Alignment Number G35 MIRR(B32 F32,) 1 City of Hope Financial Business Case 2 7 Year Summary 3 Forms Management 4 10 11 19 5 Discount Rate 11 00 6 Do Not enter data into sheet calculations from Benets Coats Worksheets Year 1 Start Year 2013 10 Gross Financial Benefits 11 Costs Savings Avoidance (Hard Benefits) 12 Cost Savings Avoidance (Soft Benefits) Year 2 2014 Year 3 2015 Year 4 2016 Year 5 2017 5 Year Total 13 14 Total Gross Financial Benefits 15 Total Gross Financial Benefits (excluding Soft) 17 Project Costs 18 Operating costs 19 Capital Costs 21 Total Project Costs Exceeds 5 years 23 Calculations Below include hard soft benefits 24 Payback (years) 25 Net Financial Benefits 26 NPV by Year (11 discount rate) 27 Cumulative NPV 28 IRR DIV 0 Exceeds 5 years 30 Calculations Below includes only hard ben 31 Payback (years) 32 Net Financial Benefits 33 NPV by Year (11 discount rate) 34 Cumulative NPV 35 IRR 5 Yr Summary ROI Summary Benefits Costs Ready A HIDUPNS000

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City of Hope Hospital is planning to invest in a Forms Management technology to help streamline their forms management processes. The investment is costly, yet

City of Hope Hospital is planning to invest in a Forms Management technology to help streamline their forms management processes. The investment is costly, yet it will bring some benefits to the organization. There are both hard and soft benefits to the investment. You were asked to make an investment decision based on the net present value (NPV) and internal rate of return (IRR). One of your analysts collected some information and estimated costs and benefits of the system over five years. In the Excel file called HW4.xls, sheets named benefits and costs summarize the collected information. Your task is to fill in the sheet called 5 yr summary. Then, you need to check the ROI summary sheet to make a recommendation to the upper management.

Fill in All the yellow cells based on the costs and benefits provided in the respective sheets in the same excel file. Do not touch the red cells. Note that, you need to repeat the calculations for both hard and soft benefits and hard benefits only (check the excel file to better understand what is meant). Based on the calculations, what are your findings and recommendation to the management. Please take a screenshot of your filled tables to your answer sheet and provide discussion. Below are some more instructions to help
1. Gross Financial Benefits and Project Costs rows directly take values from Benefits and Costs sheets, respectively.
2. Net Financial Benefits are defined as benefits-costs for each year.
3. NPV by year is the net financial benefits for a year with a discount applied (for example if discount rate is 11%, the NPV in year x is: net financial benefit in year x/(1+0.11)^(x-1)
4. As an example, Cumulative NPV for year 3 is the total of NPV for years 1 to 3.

Now update the benefits for printshop reduction in the benefits sheet to 25000, 120000, 200000, 200000, and 200000 for years 1 to 5. What are your findings and recommendation to the management.
For both part a and part b, conduct sensitivity analysis around the discount rate by trying several values of your choice. Does the net present value change? Does your recommendation change?

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BIU - - - . 3 Merge & Center - $ - % 580 Conce Forma Clipboard Font Alignment Number G35 =MIRR(B32:F32,) 1 City of Hope - Financial Business Case 2_7-Year Summary 3 Forms Management 4 10/11/19 5 Discount Rate 11.00% 6 Do Not enter data into sheet calculations from Benets & Coats Worksheets Year 1 Start Year 2013 10 Gross Financial Benefits 11 Costs Savings/Avoidance (Hard Benefits) 12 Cost Savings/Avoidance (Soft Benefits) Year 2 2014 Year 3 2015 Year 4 2016 Year 5 2017 5-Year Total 13 14 Total Gross Financial Benefits 15 Total Gross Financial Benefits (excluding Soft) 17 Project Costs 18 Operating costs 19 Capital Costs 21 Total Project Costs Exceeds 5 years 23 Calculations Below include hard & soft benefits 24 Payback (years) 25 Net Financial Benefits 26 NPV by Year (11% discount rate) 27 Cumulative NPV 28 IRR #DIV/0! Exceeds 5 years 30 Calculations Below includes only hard ben 31 Payback (years) 32 Net Financial Benefits 33 NPV by Year (11% discount rate) 34 Cumulative NPV 35 IRR 5-Yr Summary ROI Summary Benefits Costs Ready A HIDUPNS000 BIU - - - . 3 Merge & Center - $ - % 580 Conce Forma Clipboard Font Alignment Number G35 =MIRR(B32:F32,) 1 City of Hope - Financial Business Case 2_7-Year Summary 3 Forms Management 4 10/11/19 5 Discount Rate 11.00% 6 Do Not enter data into sheet calculations from Benets & Coats Worksheets Year 1 Start Year 2013 10 Gross Financial Benefits 11 Costs Savings/Avoidance (Hard Benefits) 12 Cost Savings/Avoidance (Soft Benefits) Year 2 2014 Year 3 2015 Year 4 2016 Year 5 2017 5-Year Total 13 14 Total Gross Financial Benefits 15 Total Gross Financial Benefits (excluding Soft) 17 Project Costs 18 Operating costs 19 Capital Costs 21 Total Project Costs Exceeds 5 years 23 Calculations Below include hard & soft benefits 24 Payback (years) 25 Net Financial Benefits 26 NPV by Year (11% discount rate) 27 Cumulative NPV 28 IRR #DIV/0! Exceeds 5 years 30 Calculations Below includes only hard ben 31 Payback (years) 32 Net Financial Benefits 33 NPV by Year (11% discount rate) 34 Cumulative NPV 35 IRR 5-Yr Summary ROI Summary Benefits Costs Ready A HIDUPNS000