...DRA Assignment 2 – Recreational Properties 1) FRAMING THE DECISION 1.a) Decisions a) He can exercise the option and buy the land. In this case, the possible decisions are: a.1) Sell the land without any development a.2) Develop the land with a development cost of £ 5 million and the sell it for a higher profit b) He can avoid to exercise the option and invest in another investment that will give to him a certain profit. c) Try to negotiate an option extension in order to be able to delay his decisions until the suit is settled and the risk of not getting the lease does not affect his decision anymore. d) For the purpose of this analysis we are assuming that the price of the option will remain constant. Otherwise another possible decision that Anders may make is whether to sell the option to third parties and eventually recover part of his investments. 1.b) Factors of uncertainty a) Legal suit outcome: the payoff of his decision is subject to the outcome of the lawsuit that may not allow the development of land parcels on East side of White Mountain. b) Reputation: the success of his initiative and the consequent return on his investment are conditioned by the popularity that the location will have, as for instance the quality of the snow and of the ski runs. Due to their nature, these are unpredictable factors that Anders cannot control. 1.c) Objective The objective of Recreational Properties is to maximise the payoff coming from this investment as well as minimising...
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... c. Breakeven point=(10,000+8,000)/(30-24) =3,000 batteries d. Breakeven point=(9,000+7,900)/(33-20) =1,300 batteries 7. Sensitivity analysis is a “what-if” technique managers use to examine how an outcome will change if the original predicted data are not achieved or if an underlying assumption changes. The analysis answers questions such as “What will operating income be if the quantity of units sold decreases by 5% from the original prediction?” and “What will operating income be if variable cost per unit increases by 10%?” This helps visualize the possible outcomes that might occur before the company commits to funding a project. For example, companies such as Boeing and Airbus use CVP analysis to evaluate how many airplanes they need to sell in order to recover the multibillion-dollar costs of designing and developing new ones. The managers then do a sensitivity analysis to test how sensitive their conclusions are to different assumptions, such as the size of the market for the airplane, its selling price, and the market share they think it can capture. Electronic spreadsheets, such as Excel, enable managers to systematically and efficiently conduct CVP-based sensitivity analyses and to examine the effect and interaction of changes in selling price, variable cost per unit, and fixed costs on target operating income. Sensitivity analysis gives managers a good feel for a decision’s risks. It is a simple approach to recognizing uncertainty, which is the possibility that...
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...will have spent the money for travel and preparation needlessly. Should the family spend the extra money to rent the shelter, even though it may not be needed? Sensitivity Analysis In the Smith reunion scenario, the dependent variable is the rented of the pavilion while the independent variable is the weather conditions. Sensitivity analysis is a technique that determines how different values of an independent variable will determine a particular dependent variable under a given set of assumptions (Pannell, 1997). One of the uses for sensitivity analysis is assessing the “riskiness” of a strategy or scenario in order to make a decision by identifying key values. Its purpose is to minimize variable (stricture) number calibration and determine what parameters will have the greatest impact on simulation precision. One Parameter Analysis A one-way sensitivity analysis evaluates the changes the impacts the results of a situation by identifying the key drivers (Taylor, 2009). On the day of the Smith family reunion, weather conditions are the determining factors as to rent shelter for that day. This decision making progress involves identifying key values of a possible weather condition, cool or rainy, establishes thresholds or break-even values of optimal strategy changes. The reasons for conducting this analysis are to determine. Which parameter (rent or not to rent the shelter) require further testing for strengthening the knowledge base, thereby reducing...
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...used to determine the recoverable amount (IAS 36.132(encouraged), 134(d)(i)-(v), (e)(i)-(v), 135(d)) • Key assumptions usually left out. • If discussed they were not sufficient. • Key assumptions include gross margin, government bond rates, exchange rate for the period, raw material price, inflation, market share, etc. • Comparative information is required Where goodwill or indefinite life intangibles have been allocated to a CGU (or group of CGUs), but no impairment has been recognized, reasonably possible changes in assumptions if such changes would cause the unit’s carrying amount to exceed its recoverable amount (IAS 36.134(f), IAS 36.135(e)) • Sensitivity Analysis is not provided. • If provided, it is not consistent. • If book value increases, investors would expect a clear sensitivity analysis. • sensitivity analysis should incorporate all key assumptions (beyond discount rate and growth rate) . Description of the entity’s CGU when it recognises or reverses an impairment loss for the CGU during the period (IAS 36.130(d)(i)) • Disclosures did not provide description. • If they did, they lacked substance. • Users did not have an idea of the impact of the impairment on the financial activities. Explanation of the events and circumstances that contributed to the impairment loss or reversal (IAS 36.130(a)) • Disclosures were too broad and • Did not provide causes of the events and circumstances that led to impairment. • Revised by IASB on March 31, 2004. • Goodwill...
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...CALCULATIONS OF NPV AND SENSITIVITY ANALYSIS NPV calculation using 13% as the cost of capital FOR PROJECT A Cash Flows DCF (13%) PV 350,000 0.8850 309,750 350,000 0.7831 274,085 350,000 0.6931 242,585 826,420 NPV = 826,420 – 735,000 NPV = 91,420 FOR PROJECT B Cash Flows DCF (13%) PV 300,000 0.8850 265,500 300,000 0.7831 234,930 300,000 0.6931 207,930 708,360 NPV = 708,360 – 690,000 NPV = 18,360 FOR PROJECT C Cash Flows DCF (13%) PV 200,000 0.8850 177,000 200,000 0.7831 156,620 200,000 0.6931 138,620 472,240 NPV = 472,240 – 600,000 NPV = (127,760) Assuming the cost of capital increase to 15%, the new NPV will be as follows FOR PROJECT A Cash Flows DCF (15%) PV 350,000 0.8696 304,360 350,000 0.7561 264,635 350,000 0.6575 230,125 799,120 NPV = 799,120 – 735,000 NPV = 64,120 FOR PROJECT B Cash Flows DCF (15%) PV 300,000 0.8696 260,880 300,000 0.7561 226,830 300,000 0.6575 197,250 684,960 NPV = 684,960 – 690,000 NPV = (5,040) FOR PROJECT C Cash Flows DCF (15%) PV 200,000 0.8696 173,920 200,000 0.7561 151,220 200,000 0.6575 131,500 456,640 NPV = 456,640 – 600,000 NPV = (143,360) At this point it is necessary for one to determine the sensitivity of the change in NPV of the three projects due to the increase in cost of capital. SUMMARY OF NPVS’ CALCULATIONS PROJECT | NPV @ 13% | NPV @ 15% | % CHANGE IN NPV | A | 91,420 | 64,120 | * 29.86% | B | 18,360 | (5,040) | * 127.45% | C | (127...
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...business is able to meet its recurring costs and have a surplus available for reinvestment or payment as dividends to the owners. Guillermo’s case requires a critical investigation into the business operations to determine available to him. Given the current situation, Guillermo has three very viable options to consider. He could either maintain the present business model and continue operations as currently constituted, or adopt a new business model by embracing high technology and thus investing in highly automated machines similar to what the competitor is using or change his operations and instead become a broker to one of the big competitors who is looking for an entry point into the North American market. In business, a sensitivity analysis is a business interrogative technique that allows one to change certain variables affecting a business in order to determine how the business will be in the...
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...concepts; because Healthcare has become one of the main issues United States is facing. Great powers of transformation exist on labor contained by the American health-care organization. The community discussion regarding health-care funding also admission to coverage analysis is increasing. Nevertheless lower the superficial, a discreet however eventually possibly additional important method of adjustment is ongoing: the change of health-care administration and distribution—certainly, well-being expert effort the situation—concluded the knowledge and transformation development of health-care excellence development. The management development in motherhood ladies concerning delivery duties increases moral quandaries connected to concern for females throughout delivery. Generous delivery is an authoritative, life-changing occasion that verdures an eternal impression on the motherhood lady. The labor involvement might be apparent certainly or damagingly or with moods of uncertainty. This expressive qualitative education requested which elements impact a lady's alteration in her specified delivery favorite since an unmediated labor to an analgesic labor. A nearness example of 33 prim parous and multiparous pregnancy females who had altered their detailed delivery favorite for discomfort controlling throughout birth partaken in conferences led in a month of charitable delivery. Melodies comprised deficient an unmediated delivery; altering to an analgesic delivery; sensitivity dissatisfied...
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...TABLE OF CONTENT Executive summary……….………………………………………………………2 Background…………………………………………………………………3 Analysis of company situation………………………………………………....4-8 Analysis on market situation...............…………………………………….....9-12 Swot and competitor analysis ………………………………………………12-15 New product for McDonalds………………………………………………...15- 19 Future marketing strategy..................................................................................19-21 Financial forecast............................................................................................21-22 Conclusion……………………………………………………………......22 Appendix …………………………………………………………..........23-24 References…………………………………………………………….....25 INTRODUCTION Health care system is critically important around the world. And health care industry has always been a subject area with a strong international dimension. The health-care industry incorporates several sectors that are dedicated to providing health care services and products. According to industry and market classifications the health-care industry includes health care equipment and services as well as pharmaceuticals, biotechnology and life sciences, nursing homes, providers of health care plans and home health...
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...Course Design Guide HCS/405 Version 5 1 Course Design Guide College of Natural Sciences HCS/405 Version 5 Health Care Financial Accounting Copyright © 2012, 2010, 2007, 2005, 2004, 2002, 1999 by University of Phoenix. All rights reserved. Course Description This course provides an understanding of the general principles of accounting applied in the health care environment. It includes an overview of sources of revenue for various health care entities. The fundamentals of financial planning, cost concepts, capital budgeting, and management analysis are applied in the health care environment. Issues surrounding the development and management of budgets are also examined. Policies Faculty and students will be held responsible for understanding and adhering to all policies contained within the following two documents: University policies: You must be logged into the student website to view this document. Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality. Course Materials Baker, J. J., & Baker, R. W. (2011). Health care finance: Basic tools for nonfinancial managers (3rd ed.). Sudbury, MA: Jones & Bartlett Publishers. All electronic materials are available on the...
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...Cultural sensitivity in the healthcare environment is a crucial component of the nursing program. Nurses must learn how to be sensitive to different cultures as their patients will come from different backgrounds and viewpoints. Without sensitivity, a nurse cannot properly fulfill their job as a caregiver. Authors P.D. Henderson, S.V. Gore, and B.L. Davis (2003) focus on the African American women population in relation to breast cancer recovery. This is an important topic within cultural sensitivity not only because it focuses on the female population on their coping with breast cancer, but it also focuses specifically on African American women. I found this research article as an excellent exploration of the patient population as it discusses the varying coping strategies used by African American women. As nurses learn about these coping strategies, they can better assist this specific population. Henderson and his colleagues set out to determine the way in which African American cope with breast cancer. The authors specified that they approached this research believing that this population may very well cope similarly to breast cancer as other cultures, but their goal was to determine if there were differences. Their study involved 66 African American women located in the United States who were diagnosed with breast cancer (Pg. 641). Interviews were performed with each individual participant and data from the interview was tape-recorded. A qualitative analysis was then...
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...Sensitivity Analysis Sherri Fergusson HCS/405 December 22, 2014 Terri Andrews Sensitivity Analysis Many organizations have data analysis to review the financial statements, annual report, and budget issue documents; The Patton-Fuller Community Hospital is no different. In this analysis we will look over and address all of the areas that affect staffing at Patton-Fuller. These areas will vary between the numbers of nurses to the number of patients as well as staff compensation from wages to raises. A comparison of two years’ worth of data while also using Trend Analysis will explain future budgeting aspects and the pros and cons to these decisions. Comparative data is an important tool for managers to use when analyzing data with consistency, verification, and unit measures to fully meet the requirements of understanding the reporting financial results (Baker, PhD, CPA & Baker, JD, 2011, "Chapter 14/Using Comparative Data"). Using Patton-Fuller’s 2008-2009 financial statements to provide a comparative analysis for their expenses that occurred within a 2 year period. Patton-Fuller’s balance sheet provides comparative analysis that total current assets of 130,026 in 2008, and other assets in 2009 of 128,867 decreased to a negative difference of (1159.00). Liabilities reported a gain in 2009 of 462,153 from 2008 213,450 a growth percentage of 46.19 gain. However, factoring the equity of 335,035 in 2008 to 125,564 in 2009 a percentage of 62.52 gain, the total liabilities...
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...Cultural Sensitivity and the Health Practices in Dominican Republic Manoucheka Chery Grand Canyon University: NUR-502 May 7, 2014 Cultural Sensitivity and the Health Practices in Dominican Republic The demographics of the United States is changing to one that is multicultural, multiethnic, and multilingual. Culture is a vital component in the health and wellness of individuals. Culture affects individuals' beliefs, definition of health, treatments, and interaction with healthcare providers. These beliefs may affect the patient’s compliance with medication or therapy. In order to address the diverse beliefs of today’s population the advance practice nurse must be culturally competent. Barker and DeNisco (2013) defined cultural competence as a “compilation of the clinical skills and professional behavior of a healthcare provider focused on the cultural values, beliefs, and perceptions of the consumer while both are engaged in the therapeutic relationship” (p.486). According to Higgins and Learn (1999), the Hispanic population includes a diversity of subgroups. Although each subgroup shares a common language, “they differ in traditions and customs” (Higgins & Learn p. 1105). This paper will focus on Hispanics residing in rural Dominican Republican. According to Schumacher (2010), the number of Hispanics immigrating and living in the United States is rapidly increasing. “Between 1990 and 2000, the number of foreign-born Hispanics from the Dominican Republic (DR) in the...
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...A Cost-Benefit Analysis of Electronic Medical Records in Primary Care Cost & Economic Analysis Kaira Ellis Maribel M. Howell Electronic medical record (EMR) systems are used to improve quality of care while increasing efficiency. However, there is little classified evidence regarding the benefits and costs of EMRs’. It is believed that by implementing an EMR system, there will be a significant increase in the facilitation of work flow and quality of patient care and safety (Bardon et al., 2003). The Cost-Benefit Analysis of Electronic Medical Records is conducted to estimate the net financial benefits or cost of implementing an EMR system in primary care. The hypothesis is that implementation of an EMR system in primary care can provide financial benefits and improve return on investments. A cost-benefit analyses was performed to study the financial effects of electronic medical record systems in ambulatory primary care settings from the perspective of the health care organization. The data was collected from studies at Partners HealthCare System and from published literature. The reference strategy for comparisons was the traditional paper-based medical record. The primary outcome measure was the net financial benefit or cost per primary care physician over a five-year period. A hypothetical primary care provider patient panel was created using average statistics from the Partners HealthCare System. The panel included 2500 patients which three fourths of whom were...
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...chemicals and they gradually evolved into global players. The introduction and success of penicillin in the early forties and the relative success of other innovative drugs, institutionalized research and development (R&D) efforts in the industry 4. The industry expanded rapidly in the sixties, benefiting from new discoveries and a lax regulatory environment. During this period healthcare spending boomed as global economies prospered. The industry witnessed major developments in the seventies with the introduction of tighter regulatory controls, especially with the introduction of regulations governing the manufacture of ‘generics’5. The new regulations revoked permanent patents and established fixed periods on patent protection for branded products, a result of which the market for ‘branded generics’6 emerged. 2. Environmental Analysis (PEST) Technological advancements, tighter regulatory-compliance overheads, rafts of patent expiries and volatile investor confidence have made the modern pharmaceutical industry an increasingly tough and competitive environment. Below is an analysis of the structure of the pharmaceutical industry using the PEST...
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...Kaiser Permanente (KP) is a well-known example of a fully integrated healthcare delivery system (IDS). It uses a “closed-group” staff HMO model, which implies that it is a payor and a provider of healthcare services. Through tight integration of its clinical services, KP offers one-stop shopping for most services including hospitalization, outpatient offices, pharmacy, radiology, laboratory and surgery. It uses care pathways, innovative IT Systems to derive Insights and lessons for improving patient outcomes and places a strong emphasis on Preventative Care. KP enables constant patient communication and continuously strives to achieve its ‘Home as a Hub’ goal of providing care. Thus, using the Single Connect Model, KP engages in a pro-active strategy. KP operates within the US managed Healthcare Industry. Over the last 2 years, the implementation of the Affordable Care Act (ACA) created significant opportunities for insurance providers by opening up an untapped market of individuals who were previously uninsured, and combined with increased premiums, resulted in higher Operating Results. Most recently, we witnessed the announcements of mergers and acquisitions among 4 out of the 5 largest insurance providers (Aetna’s merger with Humana for $37 billion and Anthem‘s acquisition of CIGNA for $54 billion). In 2014, KP had 9 million members and annual revenues of $ 56.4 billion, thus, creating big opportunities for high volume Suppliers, while increasing KP’s bargaining power. KP...
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