Financial Indicators Decision Making Tools
Financial Indicators Decision Making Simulation Form
Date: June 14, 2013 Team: B
Team Members:
What cost cutting options were chosen? Explain why those were chosen.
The organization chose to reduce agency staff and to change the mix of skilled staff members. The agency staff cost much more than the regular organization staff members and are not nearly as thorough in providing patient care due to lack of familiarity. The goal of increasing the ratio of aid staff to nursing staff is to allow the registered nurses to delegate appropriate tasks to the aide staff allowing them the time to tend to the more difficult or in depth tasks.
Which cost cutting loan option was chosen? Explain why.
Loan option number one was the most cost effective choice for the organization. This option boasts no repayment limitation and it resolves the immediate cash flow problem while the organization awaits the $2.3 million payment from Medicare that is to come in three months.
Which strategies for equipment acquisition were chosen? Explain why.
The three pieces of equipment; CT scanner, Xray and US machine, all were in need of replacing. There were three options for each of them in regard to financing. The organization chose to purchase a refurbished CT scanned due to the fact that it has a moderate working life and when it is done the option to upgrade is there. For the Xray machine the organization chose to use a capital lease. Xray machines have a relatively long working life span, 15 years generally, and it was a bargain price. Finally, the US was obtained via operating lease. These machines have increased technology and only a four to five year working life span. This option offered a lower upfront payment, lower monthly installments, and the option to upgrade.
Which funding option was chosen for the EHC expansion? Explain why.
The HUD 242 Loan Insurance Plan was chosen. This option offered a greater Net Present Value (NPV) than the
Date: June 14, 2013 Team: B
Team Members:
What cost cutting options were chosen? Explain why those were chosen.
The organization chose to reduce agency staff and to change the mix of skilled staff members. The agency staff cost much more than the regular organization staff members and are not nearly as thorough in providing patient care due to lack of familiarity. The goal of increasing the ratio of aid staff to nursing staff is to allow the registered nurses to delegate appropriate tasks to the aide staff allowing them the time to tend to the more difficult or in depth tasks.
Which cost cutting loan option was chosen? Explain why.
Loan option number one was the most cost effective choice for the organization. This option boasts no repayment limitation and it resolves the immediate cash flow problem while the organization awaits the $2.3 million payment from Medicare that is to come in three months.
Which strategies for equipment acquisition were chosen? Explain why.
The three pieces of equipment; CT scanner, Xray and US machine, all were in need of replacing. There were three options for each of them in regard to financing. The organization chose to purchase a refurbished CT scanned due to the fact that it has a moderate working life and when it is done the option to upgrade is there. For the Xray machine the organization chose to use a capital lease. Xray machines have a relatively long working life span, 15 years generally, and it was a bargain price. Finally, the US was obtained via operating lease. These machines have increased technology and only a four to five year working life span. This option offered a lower upfront payment, lower monthly installments, and the option to upgrade.
Which funding option was chosen for the EHC expansion? Explain why.
The HUD 242 Loan Insurance Plan was chosen. This option offered a greater Net Present Value (NPV) than the