Mary Hospital is in the process of budget planning for the next three years. They are considering two alternatives:

Alternative A Hire a pharmacist to help decrease current overtime expense associated with expanding services to provide medication reconciliation at discharge to all patients. The cost for this additional position is the salary ($109,000) plus 25% for benefits. The hospital expects that the addition of this position will save $150,000 each year over the next three years.

Alternative B Buy automated drug delivery equipment to improve dispensing efficiency throughout the hospital. The savings from this investment is estimated at $145,000 per year for the three-year period. The new system will cost $275,000 for the initial installation in year one, with expected maintenance costs of $35,000 for subsequent years.

A. Calculate the benefit to cost ratio and the net benefit using a discount rate of 5% for hiring the pharmacist.

B. Calculate the benefit to cost ratio and the net benefit using a discount rate of 5% for purchasing the new drug delivery equipment.

C. Based on the calculation, would the hospital CFO find both of these alternatives acceptable and why?

D. Based on the calculation. Which would be a better investment for the hospital and why?

Please show the steps for math so I can understand how you got the answer.