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  • UVa Hospital System The Long Term Acute Care Hospital Project

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    alka murarka
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    The University of Virginia (U. Va.) established its first hospital in 1901. with mission to establish a non-profit hospital to offer service to the patients & focus on the education, & research in the medical field. Larry Fitzgerald, the vice president for business development & finance at U.Va wants to evaluate whether or not to propose a long term acute care hospital (LTAC) project to the board of directors. The case answer six crucial questions with focus on NPV, IRR, cost of capital, scenario analysis and final recommendation by Fitzgerald to the board of directors on LTAC project. For complete solution write to alkamurarkaa@gmail.com. Solution has fully linked excel model and word write up. Price USD 85

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    UVa Hospital System the Long Term Acute Care Hospital Project

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    The University of Virginia (U. Va.) established its first hospital in 1901. with mission to establish a non-profit hospital to offer service to the patients & focus on the education, & research in the medical field. Larry Fitzgerald, the vice president for business development & finance at U.Va wants to evaluate whether or not to propose a long term acute care hospital (LTAC) project to the board of directors. The case answer six crucial questions with focus on NPV, IRR, cost of capital, scenario analysis and final recommendation by Fitzgerald to the board of directors on LTAC project. For complete solution write to alkamurarkaa@gmail.com. Solution has fully linked excel model and word write up. Price USD 85

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    333 views2 pages

    UVa Hospital System The Long Term Acute Care Hospital Project

    Uploaded by

    alka murarka
    The University of Virginia (U. Va.) established its first hospital in 1901. with mission to establish a non-profit hospital to offer service to the patients & focus on the education, & research in the medical field. Larry Fitzgerald, the vice president for business development & finance at U.Va wants to evaluate whether or not to propose a long term acute care hospital (LTAC) project to the board of directors. The case answer six crucial questions with focus on NPV, IRR, cost of capital, scenario analysis and final recommendation by Fitzgerald to the board of directors on LTAC project. For complete solution write to alkamurarkaa@gmail.com. Solution has fully linked excel model and word write up. Price USD 85

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    1. What are the nonfinancial drivers for adding an LTAC facility to the U.Va.

    Health
    System? What are potential reasons the board may not approve the project from a
    nonfinancial standpoint?

    2. What are the differences between nonprofit institutions and for-profit institutions? For
    example, how would a for-profit hospital approach the LTAC decision?)

    3. What is the average cost of capital of the for-profit hospitals provided in case Exhibit 3?
    Would this serve as a reasonable discount rate to analyze a set of for-profit LTAC facility
    cash flows? Should Fitzgerald use this number to discount the U.Va. LTAC facility’s
    cash flows?
    Average cost of capital of for-profit hospital
    Assumptions made:
     Risk-premium assumed at XXX%
     Risk-free rate considered for XXX - Yr Treasury Bond
     Tax rate assumed at XXX% to capture the XXXX
     WACC has been computed for both XXXXX
     Average WACC has been taken based on XXXXX
    Some observations have been made
    What has been considered in analysis is XXXX% as WACC as a base case

    4. Using the information in the case and the memo from Karen Mulroney in case Exhibit 1,
    complete the cash flow projections in the spreadsheet provided. What do you get for the
    NPV and IRR of those cash flows? (25 minutes)
    In absence of nil taxation.XXXXXXXXXXXXXXXXXXXXXXX NPV and IRR has also been calculated by taking into account
    XXXXXXXXXXXXXXXXXXX

    5. What are the main drivers for NPV and IRR? Show the impact on NPV and IRR by
    changing a couple of these drivers to a downside scenario value. (10 minutes)

    XXXXXXXXXXXXXXXXXX are the main drivers to NPV and IRR. Sensitivities of


    NPV and IRR have been tested by changing these drivers under several scenarios.
    Following scenarios have been evaluated:
     Scenario A – XXXXXXXXXXXXX
     Scenario B – XXXXXXXXXXXXXXX
     Scenario C – XXXXXXXXXXXXXXXXXX
     Scenario D - XXXXXXXXXXXXXXXXXXXXXXXXXX
    6. Based on your financial analysis, should Fitzgerald propose the LTAC project in the
    board meeting?
    Fitzgerald should strongly propose the LTAC project in the Board Meeting basis
    following concluding remarks:

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