An independent orthopedic clinic is consideringexpanding by opening a small surgery center instead of rentingspace in a local hospital. They ask their financial department(you) for methods of calculating whether or not they shouldconsider the project. They are unfamiliar with the methods and justwant an understanding of how they work.
Choose the capital investment decision method(Payback, Net Present Value, or Internal Rate of Return) that youthink would work the best for this situation. How would youdescribe the method so that the doctors can understand the way itworks? What outcome would they need to achieve in order to go aheadwith the project?
It was then decided that a new imaging machine neededto be purchased as part of the project. What financial and otherfactors do you think they need to consider when making adecision?
Review the posts made by your classmates and reply toat least one that recommended a different method of calculatingreturns or choosing to purchase the imaging machine. What are thestrengths of the method they chose? What are its weaknesses? Afterreading their rationale, would you change your approach?
