Question
The text (Zelman, W. N., McCue, M. J., & Glick, N. D. (2014). Financial Managment of Health Care Organizations (4th ed.). Retrieved from The University
The text (Zelman, W. N., McCue, M. J., & Glick, N. D. (2014). Financial Managment of Health Care Organizations (4th ed.). Retrieved from The University of Phoenix Collection database) gives us a good example of an expansion decision with a satellite clinic. It is quite common for hospitals to consider strategically expanding operations to other service areas. So, it is vitally important that we evaluate these decisions. One method (of course) is to use NPV. In the Satellite Clinic example (Exhibit 7.5, p. 313), we see an NPV of$499,202. How can we use this information? What does a positive NPV tell us? If you were an investor and used the payback method, how long would it take for you to start making a profit?
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