MBA FPX5014 FM Assessment2 1.docx Running Head: Evaluation of Capital Projects MBA-FPX50

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MBA FPX5014 FM Assessment2 1.docx Running Head: Evaluation of Capital Projects MBA-FPX5014 Evaluation of Capital Projects Introduction ABC Healthcare Corporation owns over 25,000 hospitals, ambul... atory surgical centers, urgent care centers and outpatient clinics across the United States. The company is dedicated to providing the upmost quality care specializing in trauma, women™s health and reconstructive surgery. ABC Healthcare employs over 175,000 healthcare professionals and supportive staff in over 32 states including Alaska and Hawaii. Besides providing specialized care, the company focuses on procuring the latest state-of-the-art medical technologies and innovations. In addition, ABC Healthcare has won numerous medical grants and accolades during its 25 years of operation. Its founder and current president Maria Gomez seeks to increase shareholder value in an effort to attract more investors and eventually expand the corporation. This report will use capital budgeting tools to compute future project cash flows that will be allocated to 1 of the 3 projects ABC Healthcare Corporation is considering, in order to increase shareholder value and add value to the company. Project A Summary: Major Equipment Purchase The major equipment purchase will cost $10 million however, it is projected to reduce cost of sales by 5% per year for 8 years. The equipment will be depreciated at a modified accelerated cost recovery system (MACRS) 7-year schedule. The modified accelerated cost recovery system allows a busi. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . .. . . . . [Show More]

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