Conduct a cost-benefit analysis using a template, and explain the concept of opportunity cost and how a cost-benefit analysis aligns with organizational needs. Recommend a plan of action based on the cost-benefit analysis.
Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in sequence.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
Competency 1: Develop financial strategies to address dynamic environmental forces. (L24.2, L24.5, L17.2)
Recommend a plan of action based on a cost-benefit analysis.
Competency 2: Analyze the cost and revenue implications for organizational changes due to environmental forces. (L18.2, L12.1)
Analyze the cost and benefits of purchasing equipment for a health care organization.
Explain the concept of opportunity cost.
Explain how a cost-benefit analysis aligns with organizational needs and future growth.
Competency 4: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration. (L6.1, L6.2, L6.3, L6.4)
Write content clearly and logically with the correct use of grammar, punctuation, and mechanics.
COST-BENEFIT ANALYSIS TEMPLATE
Step 1: Enter cost amounts as future value (FV) expectations. The future value will be automatically converted to present value
Enter benefit amounts as FV expectations. The FV will automatically be converted to PV.
Step 3: Subtract the total PV benefits from the total PV costs to get the net benefit.
Current Year
(CY)
Costs
CY +1
CY +2
CY +3
CY +4
Total Costs (Future Value)
Total Costs (Present Value)
blank row
Benefits
Total Benefits (Future Value)
Total Benefits (Present Value)
blank row
Present Value Discount Rate
PV Denominator
Net Benefit
End of worksheet
$
$
–
$
$
Current Year
(CY)
$
$
–
–
$
$
CY +1
$
$
–
–
$
$
CY +2
$
$
–
–
$
$
CY +3
$
$
–
–
CY +4
$
$
–
2%
1.00
1.02
1.04
1.06
1.08
atically converted to present value (PV). Step 2:
Total Costs
CY +5
$
$
–
$
CY +5
$
$
–
–
Total Benefits
$
–
$
–
1.10
Overview
Conduct a cost-benefit analysis using a template, and explain the concept of
opportunity cost and how a cost-benefit analysis aligns with organizational
needs. Recommend a plan of action based on the cost-benefit analysis.
Note: The assessments in this course build upon each other, so you are strongly
encouraged to complete them in sequence.
By successfully completing this assessment, you will demonstrate your proficiency
in the following course competencies and assessment criteria:
Competency 1: Develop financial strategies to address dynamic environmental
forces. (L24.2, L24.5, L17.2)
Recommend a plan of action based on a cost-benefit analysis.
Competency 2: Analyze the cost and revenue implications for organizational
changes due to environmental forces. (L18.2, L12.1)
Analyze the cost and benefits of purchasing equipment for a health care
organization.
Explain the concept of opportunity cost.
Explain how a cost-benefit analysis aligns with organizational needs and
future growth.
Competency 4: Communicate in a manner that is scholarly, professional, and
consistent with expectations for professionals in health care administration. (L6.1,
L6.2, L6.3, L6.4)
Write content clearly and logically with the correct use of grammar,
punctuation, and mechanics.
Format citations and references using the APA style.
Questions to Consider
To deepen your understanding, you are encouraged to consider the questions
below and discuss them with a fellow learner, a work associate, an interested
friend, or a member of your professional community.
What are the differences between variable and fixed costs? How do these
affect financial forecasting?
What is the purpose of a cost-benefit analysis?
Recourses
Required Resources
The following resources are required to complete the assessment.
This resource includes information on writing a cost-benefit analysis.
Plowman, N. (n.d.). Writing a cost-benefit analysis. Retrieved from
https://www.brighthubpm.com/project-planning/58181-writing-a-cost-benefitanalysis/
**Use this template to complete the assessment.
Cost-Benefit Assessment Template [XLSX]. (This is attached)
This tool provides a step-by-step guide with a real-world example.
Mind Tools: Essential Tools for an Excellent Career. (n.d.). Cost-benefit analysis:
Deciding, quantitatively, whether to move ahead. Retrieved
from https://www.mindtools.com/pages/article/newTED_08.htm
Assignment Instruction
Preparation
Use the Cost-Benefit Analysis Template linked in the Resources to complete Part
1 of this assessment. Use the following scenario that continues the scenario from
Assessment 2 as the foundation for this assessment:
One of the physician’s groups in the clinic would like to purchase an MRI
machine. Currently, clients who need an MRI must schedule an appointment at
another facility, adding time and cost to any treatment they may need. The
machine will be available for all the physicians in the clinic and will require
additional staff to operate the equipment and the office area where it will be
housed.
You must prepare a cost-benefit analysis to present to the physicians so they
may decide whether to move forward with the purchase. Be sure to consider the
non-monetary costs, such as productivity, as well as the non-monetary benefits,
such as improved customer satisfaction. Although these may be difficult to
quantify, they are important costs and benefits that must be considered.
Requirements
Prepare a two-part cost-benefit analysis.
Part 1
Complete the cost-benefit analysis template for the purchase of an MRI machine
for the clinic.
Part 2
Based on the cost-benefit analysis, write a 23-page summary:
Explain the concept of opportunity cost.
Explain how the cost-benefit analysis aligns with organizational needs and future
growth.
Recommend a plan of action that is supported by the cost-benefit analysis.
(Should the clinic purchase the MRI machine, or not?) Reference specific areas of
the analysis in your recommendation.
Submit both parts of the assessment at the same time. Please note that you
will need to attach each part separately since they are different types of
documents.
Additional Requirements
Include a title page and reference page for Part 2.
Number of pages: 34, not including the title page and reference page (Part 2
only).
At least two current scholarly or professional resources (Part 2 only).
APA format for citations and references used in Part 2.
Times New Roman font, 12 point (Part 2).
Double-spaced (Part 2).
7/14/2019
Cost-Benefit Analysis Scoring Guide
Cost-Benefit Analysis Scoring Guide
CRITERIA
NONPERFORMANCE
BASIC
PROFICIENT
DISTINGUISHED
Analyzes the cost and
benefits of purchasing
equipment for a health care
organization and considers
how the purchase aligns with
the organizational financial
strategy.
Analyze the cost
and benefits of
purchasing
equipment for a
health care
organization.
Does not analyze
the cost and
benefits of
purchasing
equipment for a
health care
organization.
Analyzes the cost and
benefits of purchasing
equipment for a health
care organization, but
the analysis is
incomplete.
Analyzes the
cost and
benefits of
purchasing
equipment for a
health care
organization.
Explain the concept
of opportunity cost.
Does not explain
the concept of
opportunity cost.
Defines opportunity cost
but does not explain it.
Explains the
Explains the concept of
concept of
opportunity cost and how it
opportunity cost. affects the profit margin of an
organization.
Explain how a costbenefit analysis
aligns with
organizational
needs and future
growth.
Does not explain
how a costbenefit analysis
aligns with
organizational
needs and future
growth.
Explains how a costbenefit analysis aligns
with organizational
needs or future growth,
but not both; or the
explanation is missing
key elements.
Explains how a
cost-benefit
analysis aligns
with
organizational
needs and
future growth.
Explains how a cost-benefit
analysis aligns with
organizational needs and
future growth, as well as
community needs and
industry trends.
Recommend a plan
of action based on a
cost-benefit
analysis.
Does not
recommend a
plan of action
based on a costbenefit analysis.
Recommends a plan of
action but does not
support recommendation
with a cost-benefit
analysis.
Recommends a
plan of action
based on a costbenefit analysis.
Recommends a plan of action
based on a cost-benefit
analysis and predicts the
results.
Write content clearly
and logically with
the correct use of
grammar,
punctuation, and
mechanics.
Does not write
content clearly,
logically, or with
the correct use of
grammar,
punctuation, and
mechanics.
Writes with errors in
clarity, logic, grammar,
punctuation, or
mechanics.
Writes content
clearly and
logically with the
correct use of
grammar,
punctuation, and
mechanics.
Writes clearly and logically
with the correct use of
spelling, grammar,
punctuation, and mechanics;
uses relevant evidence to
support a central idea.
Uses APA to format
citations and references
but with numerous
errors.
Formats
Formats citations and
citations and
references with no errors.
references using
the APA style
with few errors.
Format citations and Does not format
references using the citations and
APA style.
references using
the APA style.
https://courserooma.capella.edu/bbcswebdav/institution/MHA-FP/MHA-FP5006/190700/Scoring_Guides/a03_scoring_guide.html
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