NPV

(NPV)

NPV

For this clinic scenario, the clinic is divided into three departments: the finance department, the human resource department, and the medical records department. Each department has projects categorized as high-risk, average-risk, or low-risk projects. The heads of the department are responsible for assigning the risk factor or rate for respective projects based on their risk categorization. The clinic has a cost of capital of 8%. Adopting similar adjustment amounts as in exhibit 15.8, high risk will be adjusted by 4 percentage and low risk by 2 percentage. Therefore, the clinic’s cost of capital is adjusted upward to 12 percent in the high-risk department and downward to 6% in the low-risk department. These adjustment amounts are also used in the specific departments for individual projects. After adjustments, the system has results running from 16% for the high risk project in the finance department, which is the installation of a new finance system to 4 percent for the low-risk projects in the medical records department, which is connecting medical records to patient portals. (NPV)

References

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10522956/

 

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