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Good Samaritan is a 180-bed, not-for-profit hospital with an annual operating budget of $12.5 million. In the past, the hospital's operating revenues have often been
Good Samaritan is a 180-bed, not-for-profit hospital with an annual operating budget of $12.5 million. In the past, the hospital's operating revenues have often been sufficient to meet operating expenses and occasionally even generate a small surplus. In recent years, however, rising costs and declining occupancy rates have caused Good Samaritan to run a deficit. The operating deficit has averaged $300 000 to $400 000 annually over the last several years. Existing endowment assets (i.e. excluding the Atkinses' estate) of $7.5 million currently generate approximately $375 000 of annual income, up from less than $200 000 five years ago. This increased income has been the result of somewhat higher interest rates, as well as a shift in asset mix toward more bonds. To offset operating deficits, the Good Samaritan Board of Governors has determined that the endowment's current income should be increased to approximately 6% of total assets (up from 5% currently). The hospital has not received any significant additions to its endowment assets in the past five years. Identify and describe an appropriate set of investment objectives and constraints for the Atkins Endowment Fund to be created after Mrs Atkins's death
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