Read Health Care Finance Chapter 12 page 130 on Present Value Analysis. Note that it refers to a Present Value Table on page 135. Read the article Running the Numbers on an EHR: Applying Cost-Benefit Analysis in EHR Adoption by Tiankai Wang and Sue Biedermann (AHIMA, 2010). In a short essay, answer the following questions:
Describe the steps of a Cost-Benefit Analysis
Describe annual outflow
Describe annual inflow
What is the sum of the annual outflow and inflow?
How is Net Present Value a better decision-making method than some other choices?
In MS Excel, recreate the timeline of Cash Flows of Proposed EHR Project on page 5 of the Wang & Biedermann article. Show all your work in the worksheet. Change some of the value assumptions as follows:
The initial investment is 30,000 rather than 12,500.
In all the years 1 – 5, add an annual maintenance fee of $2,000.
The discount rate “r” is 5%.
Using the Present Value Table on page 135, calculate the NPV for each year one through five. Show the number applied from the table in the column for each year. Sum the NPV. Is it positive or negative? In your essay, describe if Anytown Hospital should take the project. You may note any other positive and negative financial and non-financial consequences to consider about the project. Create a text box on the worksheet for your essay. Add pleasing color and formatting to enhance presentation
Tags: Indiana Institute of Technology
ATTACHMENTS
m5a1_cost_benefit_analysis_of_ehr_project__1_.docx
m5a1_cost_benefit_analysis_of_ehr_project__1_.docx
