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1) What are the key elements of GVMC’s strategy? 2

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1) What are the key elements of GVMC’s strategy?

2. Why does the existing capital budgeting system need to be changed?

3. How do you think the two projects will fare under Mr. Klein’s new capital budgeting technique? As part of your assessment, calculate each project’s net present value (NPV) and internal rate of return (IRR). Then fill out Exhibit 2, and complete Exhibit 3.4. Assuming only one project can be accepted, which one should it be? Which one do you think will be accepted?    

4, Of the two projects discussed in case, which one do you think the hospital should fund, assuming that they can only take on one of the projects in the current year?

5. Discuss what is broken with the capital budgeting process at Green Valley Medical Center.

6. Calculate the Return on Assets for the hospital. How does this compare to its financing costs?